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Town council sets tax rates

Posted on May 10, 2018 by Taber Times

By Trevor Busch
Taber Times

It wasn’t entirely smooth sailing for town council in determining the 2018 property tax rates, but following a special meeting on April 26 the town has squeezed the bylaw past the post without an alteration of payment deadlines.

The property tax rates are calculated based on council’s direction of capturing only assessment increases due to development growth, but exclude inflationary/deflationary impacts due to market change within each class of assessment.

For residential and farmland, the total proposed tax rate for 2018 is 10.1541 mills, or an increase of 2.22 per cent. For non-residential, the tax rate is 15.6157 mills, for an increase of 1.99 per cent. In machinery and equipment, the tax rate is 11.9380, or an increase of 1.52 per cent. In GIL non-residential – municipal tax only, the tax rate is 11.8458, or an increase of 1.63 per cent. Non-residential DIP is 15.6498 mills, for an increase of 2.22 per cent, while machinery and equipment DIP comes in at 11.9721 mills, for an increase of 1.81 per cent.

“Nowhere do I recall any discussion regarding the tax increase or not,” said Coun. Garth Bekkering at council’s April 23 regular meeting. “Now I come to a meeting, and you give us a bylaw that indicates a 2.22 per cent increase in municipal taxes, which I don’t agree with. It’s very simple, because we were never told — I was never told, unless I was sleeping — that there would be a tax increase for 2018.”

Total tax revenue collected on the year for the municipality will be $9,111,753. To calculate property tax, multiply the assessed value of the property by the mill rate and then divide by 1,000. For example, a property with an assessed value of $50,000 located in a municipality with a mill rate of 20 mills would have a property tax of $1,000 per year.

CAO Cory Armfelt explained that with overall assessment in the community on the rise for 2018, this precipitated a potential reduction in the anticipated tax rate that is required.

“When we were preparing the budget in late 2017 for 2018, we assumed there was probably about a 2.5 per cent increase in taxes for 2018, based off the revenue that we were forecasting for 2018 in the fall of 2017. We didn’t know that exactly because that is a function of the amount of the increase in the assessed value. So when we prepared that budget in late 2017, we actually prepared that budget with about a four per cent increase of required revenue. However, the value of everything in the municipality that we tax has gone up. So crystal-balling at that point in time, we assumed that the value of everything that we tax would go up, so we assumed that we probably wouldn’t be looking at a four per cent tax increase in 2018.”

Armfelt went on to note that in his recollection, the discussion of tax rates for 2018 had been brought before council in late 2017.

“So I remember sitting here and telling council that we are crystal-balling about a 2.5 per cent tax increase based off the budget that we’re putting together for 2018. I’m very sure we had that discussion late in 2017. But the numbers that we were forecasting for 2018 — the dollar value that you were forecasting to spend, that $9 million plus — would institute about a 2.5 per cent tax rate. I’m very sure we had that conversation.”

School tax rates are calculated based on the overall education requisition required by the province. The senior tax rate is calculated based on the proportion that the town’s equalized assessment bears to the total equalized assessments of the four participating municipalities, and the requisition required by Taber and District Housing.

School taxes collected in the community will amount to $2,675,417, senior’s requisition rings in at $94,488.

Following discussion on April 23, council voted unanimously to pass first and second reading of Property Tax Bylaw 9-2018, but the motion for unanimous consent to move on to third and final reading was defeated in a 4-2 vote. Coun.(s) Garth Bekkering and Louie Tams opposed the motion, while Mayor Andrew Prokop was absent.

As part of the bylaw under consideration, any taxes left unpaid after June 30 would be subject to a six per cent penalty, with an additional penalty of six per cent for unpaid taxes after July 31. A penalty of 12 per cent would be added on any amalgamated outstanding taxes and related costs that remain unpaid after Dec. 31.

Finance director John Orwa pointed out that any delay in passing the bylaw could have an effect on the town’s tax payment deadlines.

“We’ve set up June as the date that taxes are paid. At the same time, the notices have to go out. By law, we have to give them at least 60 days for appeal. That means all of May and all of June for appeal. If we don’t meet those timelines, that means we have to reset.”

Following the defeat of unanimous consent for third reading, Bekkering called for a special meeting of council to be held prior to April 30 to discuss the tax rates further and prevent any alteration of the payment schedule.

Three days later at a special meeting of council on the morning of April 26, Orwa opened discussion with a detailed breakdown of the proposed 2018 property tax rates, which included some comparative information which clinched the deal for Tams.

“Getting the comparison for the past 10 years of tax rates and CPI was a piece of information that would have been really handy at the last meeting, because if you look at the comparison over the last 10 years, what we’re looking at today I could vote in favour. Prior to that I had some reservations.”

Bekkering yielded after a discourse detailing his personal thoughts about what the fiscal philosophy of municipal councils should be.

“I appreciate your further explanation regarding the proposed tax rate. The other day I didn’t necessarily disbelieve your explanation, but I felt we needed a little more stuff as food for thought. You talked about philosophy. The philosophy of council should be to keep taxes as low as possible, keeping in mind that it’s always a balancing act between requirements and what’s necessary, and those that are wants.”

At the conclusion of the special meeting, council voted unanimously to give third and final reading to Property Tax Bylaw 9-2018.

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