Editors please note: This is an abridged version of an article in today's Vancouver Sun

Although some environmentalists might think it's a good idea that industry in the province shut down, mill employees and the families they support might think otherwise. Pulp and paper mills in B.C. are battling tax-gouging municipalities to stay alive. While mills are burdened with a tax bill far greater than the cost of the services they receive, some municipal employees have struck gold. To stop the rot, the province must step in, cap residential property tax rates and start bringing all other property tax rates down to the residential rate.

Catalyst Paper has pulp and paper mills in four B.C. towns: North Cowichan, Campbell River, Powell River and Port Alberni. Catalyst pays about 40 per cent of the total property tax bill in those towns, but only receives about 10 per cent of the services the cities provide. Catalyst Paper refused to pay $17 million of the $23 million in annual property taxes it owes to the towns and asked the court to declare their tax rates "unreasonable and therefore illegal."

However, in a judgment in one case, the judge ruled the bylaws used to set Catalyst’s tax rate are reasonable. The judge did say Catalyst pays high taxes but "these are matters properly addressed by different levels of government and not the courts."

It's time for the provincial government to take action.

Municipal governments face few spending restraints because the bulk of the property tax bill is paid by business and industry owners who may not vote in municipal elections. B.C.'s problem is worse because the provincial government does not control the residential-to-business property tax ratios. As a result, industrial property tax rates are between nine and 20 times higher than residential rates in those four mill towns. To bring accountability to municipal government spending decisions, the provincial government must cap residential property tax rates at current levels and equalize other rates to the residential rate over a ten-year period.

Municipal governments claim if they lower taxes to industry, they might have to reduce services to citizens. But lower service levels or massive tax hikes are inevitable if the biggest employer in town shuts down.

Besides, this misses the obvious question – why are taxes so high? A big reason is because many municipal employees have hit the salary jackpot.

In the Catalyst mill towns, total municipal employee pay increased by almost 40 per cent between 2000-2008. This is between two and four times the rise in median income in those towns between 2000-2005 (last date for which data is available).

Some municipal employees have struck gold. In 2000, only 30 municipal employees made more than $75,000 per year but by 2008, 99 made more than $75,000 per year, a 230 per cent increase. Those making over $100,000 per year exploded from five to 25, a 400 per cent increase in that same time period.

Between 2007 and 2008, the top income earner in three of the four mill towns saw his salary increase by 20 per cent.

Municipal governments are using their taxing power to rubber stamp over-the-top pay to municipal employees and endangering the livelihood of families in rural towns.

While property taxes alone will not drive industry from the province, if industry is in trouble, gouging property taxes can be the last straw. If municipalities refuse to stop killing the goose that lays their golden eggs, it’s time for the provincial government to stop municipal politicians. A property tax cap and one property tax rate would create both accountable municipal governments and prosperous communities.

Click here for a chart with the municipal salary breakdown.