Tauranga City Council have approved a rating change for
the commercial and industrial sector as a further step
towards ensuring the sector pays a fair share of the
city’s operating and infrastructure investment costs. The
proposal was consulted upon as part of the 2022/23 Annual
Plan.

Excluding water charges, the commercial sector
is currently contributing 23% of total rates revenue. This
is significantly less than most New Zealand metropolitan
local centres, where the commercial and industrial sector
contributes an average of 30% of total rates.

A review
of the rating system was requested by commissioners when
they approved the 2021-31 Long Term Plan, to explore options
for sharing the cost of investment in infrastructure,
particularly transport, more equitably.

Commission
Chair Anne Tolley said the council had worked with the
sector through the annual plan consultation process to find
and implement a more equitable solution.

“We met
with commercial and industrial property-owners, as well as
businesses, earlier this year to talk to them about the
proposed changes. Even though many are facing economic
headwinds, at the moment, the vast majority were in support
of the change, because they understand that we have to
continue investing in our infrastructure.”

The
consultation came on the back of independent research which
showed just over half of the daily trips on the city’s
transport network related to commercial and industrial
activities, but the sector contributed less than a quarter
of transport rates revenue.

Commissioners resolved to
change both the general rate differential and the existing
targeted transport rate, which would see the commercial and
industrial sector contribute half of the funding for the
transport activity.

A two-year phase-in period was
approved, so the commercial and industrial sector’s
general rate differential will move to 1.9 and their
transportation targeted rate differential will move to 3.33
in 2022/23. The second phase, planned for the 2023/24 Annual
Plan process, will be to move the commercial and industrial
sectors’ general rate differential to 2.13 and their
transportation targeted rate differential to 5.

The
Commissioners also requested at the 2022/23 Annual Plan
deliberations meeting on 24 May that staff continue to look
at further options for appropriate rating within the
commercial and industrial sectors.

“Previously,
residential ratepayers were paying more than they should,
compared to the benefits they received from the transport
network, and that anomaly needed to be addressed. This
change ensures our rating system is fairer for all
ratepayers,” Anne said.

The decision comes as the
council budgets to invest $90 million in the transportation
network projects in 2022/23, rising to nearly $300 million
by 2030/31, to reflect the increasingly significant
transport investment needed. Over $2 billion is budgeted for
the transport activity over the next 10
years.

Following the adoption of the 2021-31 Long Term
Plan Amendment and 2022/23 Annual Plan budget, ratepayers
will receive a rates assessment and first invoice in
August.

Property owners will continue to be able to
see the impact of the proposed changes on their rates via
the rates calculator which is available on the Tauranga City
Council website.

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