Tauranga rates burden could be shifted off householders if mayoral candidate has his way

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Tauranga mayoral candidate Councillor Steve Morris is pressing for a review of the rating system so residents get a "fair deal". Photo/File
Tauranga mayoral candidate Councillor Steve Morris is pressing for a review of the rating system so residents get a "fair deal". Photo/File

Tauranga's rating system could be reviewed by the newly elected council after mayoral candidate Steve Morris revealed that commercial ratepayers will pay 17 per cent of the $124 million expected to be collected this year.

The Papamoa councillor has called for a fair deal for residential ratepayers, saying
they paid a higher proportion of total rates compared with the commercial sector than any other city in New Zealand.

"In Tauranga, 83 per cent of total rates are collected from residential homes and just 17 per cent from commercial properties."

This compared with Hamilton where residential ratepayers contributed 65 per cent of total rates, leaving the commercial sector holding 34 per cent and rural ratepayers 1 per cent.

''This is despite Hamilton not having a port,'' he said.

Mr Morris said he would review the rating system in 2017 to ensure residents got a fair deal. He was responding to a private survey of council election candidates that asked their opinions on reinvigorating the CBD and how it would be funded.

Funding was a challenge because ultimately the council had no money except what it took from residents. Councillor John Robson and a couple of other councillors were also interested in reviewing the rating system, he said.

"If residents don't want to go to the CBD, should we be taking their money to try and encourage them to go there. Shouldn't that money come from the businesses that seek to attract them instead of residential ratepayers who vote with their feet."

Mr Morris said the world had changed, with online shopping, double income families and shopping malls, and it was unrealistic to try and turn back the clock on the CBD.

''Some candidates are stuck in the 20th Century.''

Tauranga Chamber of Commerce chief executive Stan Gregec said the Chamber was not in principle opposed to a rates review. However, it needed to look at the relative contributions of all players and deal fairly with anomalies that might exist in the current rates structure.

"Given that the last major rates review was in 2004, we don't see a strong case or appetite for another rates review at the moment based on moving back towards a higher differential rate.

Mr Gregec said the chamber did not oppose the idea of the business community paying its fair share towards activities from which it gained special benefits - such as economic development.

''But we prefer to see a user-pays approach to these in the form of a targeted rate, rather than businesses paying a higher across-the-board differential rate."

Tauranga Mayor Stuart Crosby, who was not seeking re-election as mayor, said the last review abolished rating differentials between residential and commercial. Instead it settled on a basic rate for everyone, with the commercial sector paying an additional targeted rate to fund tourism and economic development initiatives.

He said a review needed to be clear on its objectives. Was it to shift the funding from residential to commercial, or to grow the rating pie. Generating more revenue from the commercial sector for downtown projects could be done by adding to the targeted rate - but the council had to prove there would be a benefit.

''You might be able to do that with the civic heart proposal.''

However, he was cautious about simply shifting the percentage without growing the revenue. It may well please some residential ratepayers, but things that looked simple became extremely complex, Mr Crosby said.

What other mayoral candidates said about a rates review

Murray Guy: ''A minor review only because the percentages contributed by the residential and commercial sectors largely reflected their property values. Tauranga has a higher than average percentage of residential properties.''

Greg Brownless: ''An apparent anomaly is worth taking a look at. It would need to take into account the residential versus commercial land ratio and targeted rates. I believe some Government departments don't pay full rates, so that should also be included in any review.''

Graeme Purches: ''Hamilton is two years into a 10-year transition from land to capital value rating, which is seeing residential and rural rates progressively increase, while business rates reduce. Tauranga has a significantly higher percentage of higher value homes than Hamilton, while Hamilton has a higher percentage of high earning-value businesses. If elected I will be proposing a rate review for Tauranga because that is overdue - not because of simplistic and misleading benchmarking."

Hori Bop: ''Clearly there is an imbalance that needs addressing, so yes a review is necessary.''

Doug Owens: ''Recent modelling paints a positive case for a review of rating.''

Max Mason: ''I have always intended to review the rating system, but for many reasons. The comparison with Hamilton is not helpful because 93 per cent of our properties are residential and seven per cent commercial, which is different to Hamilton. Also our businesses are mostly small or medium, and Hamilton has much larger firms with higher capital values.''

Noel Peterson: Tauranga rates need reviewing, there is currently debate in the community of an imbalance suggesting residential ratepayers pay more than the commercial sector, we should also look at a rate freeze and options to reduce rates, ratepayers can only afford so much, continual increases are not sustainable.

Larry Baldock: ''If I am elected Mayor I will be reviewing quite a few things, rates will be one of them. Those candidates who are advocating for changes in the ratio of commercial to residential rates are in fact intending to increase the overall rate take by increasing commercial rates. Council needs to review its charges and efficiency before taking more rates.''

Percentage split between residential and commercial rates
Tauranga: 83/17
Hamilton: 65/34 (plus rural 1 per cent)
Dunedin: 64/30 (plus lifestyle 3 per cent and farmland 3 per cent)
Rotorua: 53/24 (plus lifestyle 11 per cent and farming 11 per cent)
Western Bay District: 51/5 (plus rural 44 per cent)

- Bay of Plenty Times

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