PAGE 12, WHITBY FREE PRESS, WEDNESDAY, MARCH 1, 1989 Helping to meet needs in growth Lot levy financing Lorna Miller When is $300 million not enough? When it comes to covering the increasingly high cost of educa- tion in Ontario. So say government representa- tives at various levels, about the burgeoning regions of Durham, York and Peel which are feeling the pinch of rapid growth on the school systems. "The cost of provincial commit- ment to education capital has risen from $78 million three years ago to $300 million now," says Durham Centre MPP Allan Furlong. "And even this amount is not enough.» The Green Paper proposed by the Province will finance capital projects in high growth areas. It examines the possibility of enhancing school board auto- nomy and accountablility by allowing boards to collect lot levies to finance new school con- struction. "I was hoping that the lot levies for school construction would never become necessary," says Durham regional chairman Gary Herrema. 'ut in Durham Region and other rapidly grow- ing areas, property taxes just don't meet the demand that the growing population puts on exist- ing schoolsystems. Whitby mayor Bob Attersley acknowledges the need for in- creased revenues, but questions the levies. "The levies will be added onto the cost of new homes. The deve- lopers will never absorb this cost," says Attersley. "I don't think this would be a wise move in this period of lack of afford- able housing." "The government has a revenue versus expense problem and they are looking for a way out," says Frank Giannone, pre- sident of the Toronto Home Buil- ders' Association and developer of two properties in Whitby, with another proposed. He and other builders are lobbying against the proposal. "The government was going to hide the levy in the one-price structure that includes levies and taxes and is passed on to the consumer at the time of pur- chase," says Giannone. "This is unfair, and will result in increases in the prices of homes, old and new, across the board." Herrema says the levy "would be impossible to hide.» And be says it could "open the door" to similar levies to develop day care centres, seniors' homes and gar- bage dumps. "It's not mandatory that all municipalities raise lot levies," says Ontario Treasurer Robert Nixon, who issued the Green Paper last December. He adds, however, that growth regions such as Durham might find it "very attractive" to do so. Sam Cureatz, Durham East MPP, says, "The price of homes does not have to rise. Builders are now in a strong demand market due to the shortage of affordable housing. But with more housing starts in Durham Region the prices will moderate as affordable housing comes onto the market." Giannone believes the government is looking to fund medical and universal education plans with this levy. "We are presenting our suggestions to the government on Feb. 28 and if they reject them we are instigating a public forum," he said recently. Ho feels that the levy is "grossly unfair" to those citizens who have raised their families, paid their taxes, and now would like to move into a new home across the street. "They'll be paying twice for new schools that their families will never use when the extra levy is in place on new housing," says Giannone. "The monies raised by the levy will not go to the Province. The money is intended for municipalities and school boards to raise revenues and fund capital costs," says Furlong. One solution, suggested in a question and answer paper issued by Furlong, suggests that the levy be incorporated into the mortgage on the home. That way, any part of the lot levy that is passed on by the developer, and the carrying costs of the mortgage, are known in advance. The Province is not cutting funding for schools, he says, noting it will pay 60 per cent on average toward the costs of new school construction, with a three-year commitnent of $500 million worth of approved schools per year. The question of accountability of school boards to the public and the Province will be "very strictly" monitored to see that the levies are not raised over the proposed 60 per cent, and the account wil be available to the public. The levies now imposed by the various growth areas are inconsistent, with Brampton charging a healthy $26,103 on a 37-ft. lot, while in Durham the same lot had a levy of about $6,000. Thus, housing in Durham Region will be hit with a greater levy in this proposed new tax. Giannone says, "The Province has backed away from its commitment to education funding and is leaving it increasingly up to municipalities and new home buyers. It's bad management and bad government. "The government says that if homes weren't built, there wouldn't be a problem. But if we weren't building homes there would be an end to the housing crisis. Are we to blame or are we helping? Without us, the problem would be three times as bad," Giannone concludes. UNI"CIPAL DEC"ARGE E M Area Municipal Levy Oshawa Ajax Newcastle Pickering Whitby Brock(1) Scugog(1) Uxbridge(1) $2,389 2,500 2,819 2,875 3,100 1,500 2,200 3,100 Proposed 1989 Regional Levy $5,770 5,770 5,770 5,770 5,770 5,770 5,770 5,770 Total $8,159 8,270 8,589 8,645 8,870 7,270 7,970 8,870 jN.te: (1) Includes cash payment in lieu of parkland donation. Levies could help pay for "hardcore educational needs" By Debbie Luchuk The Durham Board of Educa- tion as well as other education boards in the province may soon be able to take advantage of lot levies to alleviate funding shor- tages. Brian Cain, presenting a staff report on proposed provincial lot levy legislation for school boards, told the board that lot levies "follow the same philosophyas lot levies for municipalities. They provide for each municipal popu- lation, and should pay for hard core educational needs. Levy increase recommended Durham Region staff have recommended that regional coun- cil approve an increase in the lot levy, the amount charged to a developer by a municipality for developrnent of a lot, to $5,770 from $2,955, an increase of almost 100 per cent. The increase is needed to pay for $165-million in sanitary sewer work during the next 10 years, $184-million in road work during the same period and $178-million to supply water to new residential development during the next 10 years. In comparing lot levies, staff noted that Durhan, which has the third- highest growth rate in Southern Ontario, has the fifth- lowest lot levy charge. Ottawa-Carleton has the highest levy at $6,605 while Hal- dimand-Norfolk charges a levy of $1,450. When added to the levy char- ged by the Town of Whitby, $3, 100, a developer would have to pay $8,870 to build a house in Whitby, if regional council approves the increase. Mayor Bob Attersley told The Free Press Whitby has no plans in the near future to increase its lev. Lgion staff have also noted that an increase in lot levies does not cause an increase in house price. Using figures provided by the Toronto Home Builders Associa- tion, staff have calculated the average price for a house in Durham has increased 206 per cent since 1976 while the lot levy has increased 31 per cent. "It means significant dollars will be available for the projects we cannot afford." However, the Province is pro- posing a cut of 15 per cent in funding to school boards with the legislation. Provincial funding could decrease to 60 per cent from 75 per cent. Cain identified two concerns staff had with the proposed lot le legislation. Thereductions of 15 per cent by the Province would "let the ministry off the hook" in provid- ingfor new pupil places. Staff advised the board not to "let up pressure on the ministry yet." The second major concern identified was the concept of a joint account, with funds to be allocated from that account on the basis of approved projects with the separate school board. Staff advised the board that it would be best if the ministry would create "clear, simple gui- delines" to determine the appro- val of capital projects for new pupil places. "The municipalities have the benefit of lot levies," said Osh- awa trustee Ruth Lafarga. "Many things have been funcded by lot levies that are not as important as schools." Responding to the concern raised by staff's report on the legislation that lot levies would impact "affordable" housing, Lafarga noted that the "CMHC said lot levies would not impact housing prices. "We as a growth board are being crippled by what we have to pay (to keep up with growth)," she said. Trustees echoed Lafarga's com- ments and the boardpassed a motion to support stafFs recom- mendations from the report: - that the board support the con- cept of lot levies; - that they oppose the provin- cial cutback in funding; - that the Province~assure the growth boards that they will have equal access to dollars for non-new pupil place projects; - and that the boa~rd reject the concept of the joint account with the separate school board. The Kidney Foundation supports research, patient services and public education. Please give generously. THL KInSNI FOx'Nu-\ eI\ OF Wec can't live without yoU