Without jobs, Burlington’s taxes increase
City’s goal must be aggressive job creation
Council members received sobering news at several recent meetings: without an aggressive strategy of job creation, Burlington residents will see their property taxes spike, services cut or development expand into rural areas.
Here’s why: Providing all of the services required for residents – community services and infrastructure for example – far exceeds the tax revenues collected. By contrast, the “industrial, commercial, institutional” tax class – or “ICI” -pays more than double the residential property tax rate, but only costs a fraction of that to service. There can be as much as an 80% profit on industrial taxes, versus a 40% loss on residential taxes.
A balance between residential and ICI tax revenue is critical to municipal health, yet currently, residential taxes account for 82% of Burlington’s tax revenue, versus 18% from the commercial/industrial sector.
Non residential growth has essentially flatlined in Burlington over the past 15 years, while residential growth has almost tripled. Burlington used to see double-digit employment growth; now, 2% annual growth is “optimistic.” When residential growth outpaces economic growth, the city is left with three unpalatable choices: cut services, dramatically increase property taxes, or expand development into the rural area.
If this isn’t a burning platform to focus on economic development, “you can certainly smell the smoke,” commented Scott Stewart, our General Manager of Development & Infrastructure, at a recent council workshop.
This is a wake up call for our city. We must focus on job creation. Our neighbours in Oakville, Milton, Hamilton are already doing so – if we don’t, we’ll be left behind. The financial health of our community requires a rebalancing of residential and economic growth. So does our social and environmental health.
About 56% of residents work outside Burlington, including 11% commuting to Toronto. Sending our best and brightest to work in communities outside Burlington creates a brain drain. These residents also spend much of their time commuting. That adds a strain on our roads and our environment, but also eats precious hours that could be spent with family or participating in our community.
Job creation will also help meet intensification targets and help preserve the character of our neighbourhoods.
There are city-wide intensification targets set by the province, with higher targets for the downtown, which is identified as an “urban growth centre.” The target here is 200 jobs or people per hectare. The target can be achieved through job creation, but most recent developments downtown have been highrise condominiums. I’ve heard many times from residents they don’t want the downtown to become another generic concrete jungle of condo towers – they’re looking for balanced, appropriately scaled growth. Experience has shown that the recent condo developments have not delivered the “feet on the street” required to support the economic health of downtown merchants. What’s needed is year round, daytime foot traffic from office workers.
To address these challenges, the city has been divided into five strategic employment districts along the 407, 403 and QEW corridors, Bronte Meadows (in northeast Burlington); and downtown Burlington.
For each area, the Burlington Economic Development Corporation (BEDC) will work with city staff, council and economic experts to develop a plan to attract jobs, including any investment required by the city to make it happen. The downtown plan is expected to come early in 2013, and focus on a “boutique office environment” for employers who value a creative urban experience.
City-wide, the BEDC aims to add 29,000 jobs and $600,000 in ICI tax revenue annually (up from current forecasts of 18,000 jobs and $200,000 ICI tax revenue). The target is for 50% of all new jobs to be held by Burlington residents.
To make it happen, BEDC needs a revised operating model and budget, including added investment from the city. As I reported in the last issue of City Talk, BEDC relies on fundraising events for part of its budget, but planning these activities eat valuable resources. Staff time on events is roughly 1.5 full time equivalents, versus only .5 FTE (and $20,000 or 1% of budget) devoted to business attraction. Refocusing BEDC and providing an appropriate budget will reposition BEDC from “taking orders to making orders,” commented Sheila Botting, of Deloitte & Touche, at a recent workshop.