1. How is the City spending my tax dollars?

    Property taxes are collected by the City for its own uses and on behalf of other government agencies. The purpose of delegating this task to the City alone, is to reduce the administrative costs. The City administers the tax billing and collection for the Regional Municipality of Niagara and on behalf of the local School Districts. Niagara Falls City Council does not control the taxes from other agencies.  

    On a residential property, the annual property tax bill collected is allocated as seen in this chart.

    2. What is the difference between the operating and capital budgets?

    The Operating budget pays for all the day-to-day activities of the Corporation including salaries and wages, utilities, supplies, fuel, and insurance.  Services funded primarily by tax dollars include protective services like the fire rescue services, and by-law compliance; operational services like snow removal, street sweeping, pothole and road repair, line painting and building maintenance; maintenance of local parks like Oakes Park, Firemen’s Park, and your local neighbourhood park. Then there are community services such as tourism, economic development, community planning, and engineering services and operational costs like administration, legislative services, and human resources. Some services are paid for from property taxes but are supplemented by user fees including recreation services, like swimming lessons, Older Adult Programs (60+), The Niagara Falls History Museum and Gale Centre Arena.

    The Capital Budget identifies the projects approved for infrastructure renewal for that year.  Infrastructure renewal of municipal assets like roads, sidewalks, storm drainage, equipment, streetlights, and community facilities among many others is critical to residents. Taxes are collected through the operating and utility budgets and transferred to the capital budget.   In addition to the transfers from operating budgets, the capital budget is also funded from other sources like grants from senior levels of government, reserves, development charges and sometimes debentures.

    3. How can I influence the City’s budget?

    Residents will learn how the budget process works, how tax dollars are used, and the value tax dollars bring to Niagara Falls. The 2023 Budget hub on Let’s Talk Niagara Falls is a one-stop shop for the latest news, updates, and engagement opportunities relating to next year’s budget:

    • Engagement kicks off on ___________ with an online survey.
    • Learn more about how the budget works, and how it impacts you.
    • Watch informative videos explaining the budget process (External link), user fees and the infrastructure gap)
    • ­­­­Use the Q&A to ask our Finance staff questions about the budget, and get their responses

    Feedback will be received until _________ and will be shared with City staff and Council as part of the 2023 City budget process.

    4. Why can’t the City run a deficit?

    The Municipal Act, 2001 which is the governing body for all municipalities in Ontario does not allow for a municipality to run a deficit. Section 290 states:

    For each year, a local municipality shall, in the year or the immediately preceding year, prepare and adopt a budget including estimates of all sums required during the year for the purposes of the municipality, including:

    • amounts sufficient to pay all debts of the municipality falling due within the year;
    • amounts required to be raised for sinking funds or retirement funds; and
    • amounts required for any board, commission, or other body.  2001, c. 25, s. 290 (1); 2006, c. 32, Sched. A, s. 120 (1)

    5. What are the City’s sources of revenues?

    The City’s main revenue sources include:

    • Taxation and User Fees
    • Contributions from other Governments which includes payments in lieu of taxes on properties owned by federal or provincial levels of government and grants from provincial and federal levels of government
    • Other Revenue which includes fees, service charges, licenses and permits, penalty and interest on taxes, investment income 

    6. How do I calculate my property taxes?

    Property taxes are calculated using the assessed value of your property and multiplying it by the combined municipal, regional and education tax rates for your class of property.   

     

    To understand how your property tax is calculated, watch this short video from Municipal Property Assessment Corporation (External link) (MPAC).

     

    As you saw in the video linked above, your property tax is proportional to the value of your property

     

    In this example, a small municipality with three properties worth $125,000, $175,000 and $200,000 has services costs of $2,000 that are paid by property owners through property taxes.

     

    Each property owner in the municipality pays a proportion of that $2,000 based on their property's assessed value. This is calculated by first adding up the value of all three properties, for a total of $500,000. Since the cost of services is $2,000, the tax rate is 2,000/500,000 = 0.004, or 0.4%. Therefore:

    • The owner of the $125,000 property pays $500.
    • The owner of the $175,000 property pays $700.
    • The owner of the $200,000 property pays $800.
    • The total of the property tax paid by the three property owners is $2,000.

     

     

    7. What are user fees and how do they affect the municipal budget?

    A user fee is a charge levied upon an individual for the use of a public service. A user fee is supplemented by the tax levy. The user does not bear the full cost of the service a portion of the service is covered by the general tax levy. User fees in the City of Niagara Falls include recreation services, like swimming lessons, Older Adult Programs (60+), The Niagara Falls Exchange, The Niagara Falls History Museum and Gale Centre Arena. 

    8. How does penalty and interest revenue from property taxes affect the budget?

    Section 345 of the Municipal Act authorizes a municipality to pass by-laws to impose late payment charges for the non-payment of taxes or any instalment by the due date.  All taxes billed during the year that remain unpaid in that year may be subject to a penalty charges, from the date of default to the date of payment or to the end of the year whichever comes first.   Taxes billed in previous years that remain unpaid are subject to an interest charge from the beginning of the year that taxes went into arrears until the date of payment.  

    Penalty and interest are a revenue source for the City in the operating budget.  A decrease in penalty and interest revenue results in an increase in the tax levy and an increase in penalty and interest revenue results in a decrease to the tax levy.