May means a lot of different things to people.
For some it’s Spring, others its about Mother’s Day, for some people it is about getting out in the gardens and planting flowers, or for some it is about getting active and the start of outdoor sports.
But for council, and administration, May means a lot of questions about residential taxes. A bit of background to start, but the last two years of budget talks council aimed to ensure that there would be no increase to the budget.
Now you may be thinking to yourself while reading this, “My taxes have gone up or have gone down” and you might be wondering why that is. So I want to take some time today and give you a quick answer to that question.
First off, when council sits down with administration to work on the budget, we do not look at how much money we have, council looks at what it costs to operate the town for another year.
That cost becomes the basis for the operational budget, and usually takes up most of the budget time. Council also has to work on the capital budget, which is mostly funded by grants, reserves and sometimes debentures (loans).
The Town is limited on the amounts of funds we can collect, and on average a road improvement or sewer upgrade can cost somewhere in the ballpark of $1-million, or even more, to fix. Capital projects like sewer upgrades and road rehabilitation project don’t take as long as operational budget talks.
When it comes to saving money in the operational budget, council either finds cheaper ways to do business, by either using less people to do the same service, or reduce services.
It takes approximately $20-million to run the town for one year. Of that $20-million, we roughly only receive about $8million from taxes. The remainder of the $20-Million comes from grants, user fees, and intermuinicpal agreements.
A quick side note, but still important to know, that a small increase across the board of 1 per cent, would only give the town an additional $78,000 per year. And to put that into perspective, one new police officer would cost an additional $150,000.
So how do we determine how much everyone pays? The MGA (our bible/rule book created by the Province with input from municipalities) says that we collect taxes based on assessment of properties. The Town of Slave Lake hires an independent company which assesses the costs on every piece of property in the town. Provincially owned buildings are exempted, as well as churches, schools and some non-for profits buildings.
We then have the assessors tell us the total value of assessed properties and divide that by the money we need. The end result is the mill rate. SO what is more important…. mill rate or the assessment? Bluntly neither are.
What is really important is how much money it takes to run the town! If we keep the cost of running the town the same, then if your assessment goes up or down it doesn’t matter, you pay the same.
If you want to know why your assessment went down and your taxes didn’t…that’s the answer.
Now to add some more info and get you really confused. Your tax bill is actually made up of three things. Property taxes (as listed above…the money we collect to get our $8-million), school requisition, and seniors foundation. School requisition is a number we collect on behalf of the Province. Essentially they tell us a dollar amount that needs to be collected, and we then establish a mill rate for that and collect on their behalf and forward them the payment. Seniors requisition is also a number we have no control over.
The province, in combination with a locally run board establish a number required to run their facilities and we are required to collect this amount on their behalf and forward it on.
This year there was no increase in the senior’s requisition but there was an increase in the school requisition. This is why you may have an increase in your total tax bill over last year even though the town kept saying there would be a 0% tax increase.
I hope this doesn’t make you more confused and adds a little insight into how your taxes work. If this leaves you with more questions, feel free to call our finance department at 780-849-8015, our CAO Brian Vance at 780-849-8006 or one of your elected officials to provide clarity around taxes.
Alternatively, if you have questions about your assessment call Kevin our assessor at 780-418-6905 and he can answer questions about how their office came up with the assessment value of your property.