Rates increase covers rising costs

7.9 per cent needed to cover increases in expenses

The proposed 7.9 per cent rates increase for Horowhenua for this year is just keeping the lights on and it is the amount by which the council income from rates will be going up.

Rates rises or decreases for individual properties have little to do with this number.

The proposed 7.9 per cent increase is needed to cover increases in council expenses outside of its control, such as insurance, interest rates, depreciation and contract rate increases. Even with this increase, council will still be required to borrow 0.3 per cent to cover these costs, as the total rates income for council is 8.2 per cent.

The rates review has also taken place this time, as requested by the community some time ago, and proposes a more equitable distribution of the burden, choosing capital value over land value for the general rate portion of your rates bill, which is about 25 per cent of the total bill.

Targeted rates form 60 per cent of your rates bill. Targeted rates are for things you actually use, such as roads, rubbish collection, recycling and water services. So, rural residents who do not have the option of connecting to water or wastewater do not pay for this.

Equally stormwater is only rated for in urban areas. For solid waste disposal rural dwellers only pay 20 per cent of the cost, to cover the operation of the Levin Landfill and local transfer stations, while town residents pay 80 per cent of these costs in their rates.

A few people will have higher rates bills, but many will see a decrease. The district has 4000 households that earn less than $65,000 a year. These are the people who struggle to put food on the table because they spend around 50 per cent of their income or more on housing and rates. The proposed change means they will likely see less of an increase in their rates bill.

As an example — if the council leaves the rating system as is, 98 per cent of ‘other rural’ dwellers will see their rates decrease, while 2 per cent would see an increase. This compares to a 65 per cent of residential properties that would see an increase.

If the preferred option is adopted by council, that is option 2, 67 per cent of residential and other rural rate payers will see a decrease and 33 per cent will see their rates go up. Of those considered to be rural farmers 53 per cent will see a decrease and 47 per cent an increase. Of business owners 61 per cent will see an decrease and 39 per cent an increase.

For a Levin residential property valued at $550,000 Capital Value and $315,000 Land Value under the December 2022 QV Valuations rates will be spent as follows:

Of the $246.97 paid each month: Community facilities $40.65, property $3.67, community infrastructure $22.08, representation and community leadership $23.58, community support $11, planning and regulatory services $12.67, road transport $16.33, solid waste management $14.73, stormwater $12.17, water supply $37.55, wastewater management $52.54.

Every ratepayer will have had a letter from the CEO explaining the changes. i

Consultation information for the Long Term Plan Amendment is available online at letskorero. horowhenua.govt.nz/ LTPA.