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Winners and losers

There were always going to be winners and losers when it came to the province’s new employer health tax, so I guess it’s not surprising there’s one of each when it comes to local government here in Delta.

There were always going to be winners and losers when it came to the province’s new employer health tax, so I guess it’s not surprising there’s one of each when it comes to local government here in Delta.

The NDP initiative that eliminates Medical Services Plan premiums and shifts the financial burden onto employers looks like it will end up being cost neutral for the Delta School District following Finance Minister Carole James’ announcement earlier this month, but will add significant expense for the City of Delta. Although it might seem strange that one arm of local government is spared but another gets hit hard, it wasn’t that difficult to envision this kind of outcome.

You see, the school district gets its funding from the province, so if it incurs additional costs, it’s likely to turn to Victoria to offset them or tell everyone who will listen that it has been forced to cut staffing or programs (or both) to make up the difference. The City of Delta, on the other hand, is funded by me and you, so the provincial government isn’t anywhere near as concerned when costs rise on that front.

The upshot to all of this is that the employer health tax will hit city hall to the tune of about $850,000 annually, an amount that will either have to be absorbed into the existing budget, which would mean cuts elsewhere, or passed along to taxpayers.

The new council that will be elected this fall will have to decide how it wants to proceed on this issue, but I suspect it would be more apt to pass those costs along, making sure all property owners know it’s courtesy of the NDP government, rather than have to cut local services to spare Victoria from any backlash. It would mean about one per cent more on your tax bill to cover Delta’s additional payroll costs, so if you’re paying, say, $4,000 a year in property taxes, you’d have to cough up another $40 to cover the new expense.

That extra hit on the property tax bill would be chump change compared to paying a year’s worth of MSP premiums out of your own pocket, but if you weren’t having to cover your own premiums, then it’s simply one more tax that’s being piled on top of all the others.

It’s another example of a tax that produces both winners and losers.