Many cities and towns as well as some native reserves have come to rely on gaming facilities as a way to raise revenue and offset property tax increases. Here in Canada where cities are forbidden to have a local sales tax (unlike the United States), it's especially lucrative when a municipality makes that choice.
This leads to the issue of how much revenue should be shared from casinos and slot machines at racetracks. While it's presently a local issue here in Hamilton, it's also has the potential to become one nationally, especially in areas where municipal amalgamation has occurred.
Flamboro Downs, a standardbred racetrack, was teetering on the edge when it won an unexpected windfall during the 1990s -- 750 slot machines. The revenues the track kept enabled it to boost purses and stay in business. The local municipality, at that time the sprawling Town of Flamborough, obtained the royalties, running about $8 million per year to begin with and now about $15 million.
When the six cities and towns in Hamilton-Wentworth were merged into the megacity of Hamilton in 2001, it was agreed that Flamborough would keep the revenues from the track. This was keeping entirely with what are informally called the "Cummings principles," which states that in case of a merger between two or more cities, facilities built for the benefit of the former city should stay with that community or borough which is now part of the larger city.
The money went to pay off the huge debt incurred when Borer's Creek required rehabilitation.
Now the debt has been paid off, the local city council had to decide what to do with the money. On Monday, city council here in Hamilton proposed to pool the money across the city. For most residents in the old city, this will mean about a $15 cut in property taxes. For residents of Flamborough, however, they face a hike of about $200. The final vote on the issue is tonight, and many in Flamborough -- and I can't blame them -- are planning a tax revolt.
Amalgamation isn't the only reason for such a massive increase, contrary to what people in Carlisle, Waterdown, Rockton and Freelton may believe. The freeze on property assessments that Ontario Premier Dalton McGuinty imposed is lifted this year. Moreover, as Waterdown has become a bedroom community even though Hamilton is outside the GTA, property values have skyrocketed -- although that may be abated with the current sub-prime crisis.
But it just seems wrong to drop a guillotine like this in such an arbitrary manner. There may be an argument that the money belongs to all the people of Hamilton and not just those in Flamborough (given that the track and slots are regulated provincially and not locally); but surely there could be a phase-in of the pooling over three to four years to ease the bite. For better or for worse, amalgamation is a done deal and won't be undone but this is not the way to engender good will.
That leads me to another point. On Sunday, I received a robocall from Terry Whitehead, the councillor for the ward I live in, urging people to pack the meeting to provide a counter to the expected crowds from Flamborough. I don't mind rallying people to a cause, but I don't appreciate being called by a robot. Unfortunately, the proposed do not call list won't apply to elected officials or candidates to such offices, so I can expect more calls like this and that too is wrong. I just don't like it.
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