THE ONTARIO GOVERNMENT'S decision to institute a two-year

freeze on property reassessments is already under attack, but for what we see as the wrong reasons.

Mississauga Mayor Hazel McCallion said last week the freeze won't do anything to help taxpayers and could make things worse, and told Peel Region councillors market value assessment is like democracy - it has its weaknesses but is the best system available.

She suggested that the province should simply start implementing recommendations to fix the system proposed recently by Ontario Ombudsman Andr Marin.

Among other problems, Marin found the system relies too heavily on computerized appraisals of properties and not enough on actual selling prices in neighbourhoods.

"In two years, if the economy moves along like it has, property values will be way up and the new values will have to be phased in," Mayor McCallion said. "We'll be back to capping increases and we'll still have a mess."

Brampton Mayor Susan Fennell agreed, terming the freeze a "knee-jerk" reaction that will solve nothing. "It will interfere with the evolution of property tax assessment," Fennell said. "Properties need to be assessed properly and annually."

We couldn't disagree more with both points of view. If nothing else, the freeze should let Ontario's Municipal Property Assessment Commission (MPAC) cut its staff and reduce its budget, thereby at least temporarily saving the municipalities who must foot the bill a lot of money.

As we see it, the assessment system itself should be scrapped in favour of a new, vastly simpler way of calculating property taxes, and that should be only one element of a far-reaching reform of Ontario's far-too-politicized taxation system.

There may once have been a day when value-based assessments made sense. But that would have been before the introduction (nearly a century ago) of the income tax, and at a time when there was little or no inflation and when the size of a home was a good indication of the wealth of its owner.

Today, we're in an era when Ontario millionaires may make do with modest homes while spending far more on yachts, Florida condominiums and an opulent lifestyle, while pensioners try to cling to family homes that they bought in the 1960s for $20,000 and now are assessed as worth as much or more than the millionaire's down the street.

Any way you look at it, market value assessment is merely a means of determining how the over-all property tax burden should be shared. And particularly in an era of fluctuating prices it must be the most subjective, complex and bureaucratic means of achieving that objective imaginable.

In our view, real property tax reform would involve replacing valuations with taxation based simply on the amount of property owned, how that property is zoned, and the level of municipal services being provided. With such a system in place, the only time an individual property's share of the tax burden would change would be when it is rezoned (up or down) or the structure was enlarged.

Unfortunately, there's precious little chance of that ever happening in an era when property taxes are used for expensive undertakings that have precious little to do with a property's servicing requirements. And that's why we so desperately need real tax reform in Ontario.

Today, at least half the property taxes local residents pay are for services they use as individuals, not as property owners.

It's entirely proper to have property taxes as municipalities' revenue source for such services as water treatment and distribution, sewage systems, local policing and fire protection, local streets and sidewalks, local transit and community parks. But what of education, public health and highways?

As we see it, education today is overwhelmingly a provincial responsibility and any meaningful tax reform would include

having all the costs of elementary and secondary schools paid for from the provincial treasury, with the income tax, not property taxes, as the revenue source.

Similarly, in the transportation field, property taxes should be required to pay only for building and maintaining local streets. County, regional and municipal arterial roads should be paid for - directly or indirectly - by taxes on vehicular fuels and licence fees.

To us, it makes no sense to use property taxes as the sole revenue source either for roads that once were provincial highways or for arteries like Airport Road where the vast majority of the traffic is vehicles from outside the local jurisdiction.

As one small example, consider something witnessed daily in Dufferin County: the hundreds of Gibson Transport tractor trailer units that make their way between Honda Canada in Alliston and suppliers in the Kitchener-Waterloo area and other parts plants in Southwestern Ontario.

Although a lot of these heavy vehicles do use Highway 89, a huge number also travel along Dufferin Roads 3, 11, 16 and 109 and will undoubtedly hasten the need to rebuild and repave these arteries, which once at least qualified for provincial grants.

Now, Dufferin having decided that even the tiny federal gas tax rebate should go to local municipalities, all such costs must be borne by property taxes.

Another illustration of the absurdity of the current tax system is found at Harriston where, as a result of the Harris government's downloading of thousands of kilometres of provincial highways, property taxes are paying the huge cost of maintaining the former Highway 9 east to Orangeville, while the roadway west to Kincardine remains financed entirely by the Province because it somehow avoided the download monster.

Clearly, one element of tax reform should be a proper sharing of fuel taxes between the two levels of government so the costs of roadways can be borne by those actually using them.