Hamilton councillors have gone along with a staff recommendation to make some adjustments to the area rating system for fire services that will see a slight tax decrease for rural areas who are only served by volunteer fire. The present system allows for two rates—urban and rural; but with the rapid growth of the suburbs, some of these areas are now served by a combination of full-time and volunteer firefighters. Staff are recommending a three-tier tax structure to reflect the change in service levels. Areas now getting full-time service would see an increase in taxes of $80 over two years. Areas served by volunteer firefighters would see an $80 drop. Residents served by the new category of composite service would see a $164 dollar drop phased in over two years. There are roughly 38,000 homes in the composite category compared to 123,000 who receive full-time service.
The staff report also says the highly-controversial issue of area rating for transit is scheduled to come back to council with a recommendation this spring. There has been a major ideological debate on this issue since amalgamation 23 years ago. Urban transit supporters claim the equalization of taxation would force service into the suburban communities, but opponents point out that eliminating area rating only redistributes taxation—it doesn’t raise any new money.
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