Property taxes on the rise
Okotoks: Education taxes increase 12 per cent
The Town of Okotoks hasn’t calculated the final tax bill for Okotoks homeowners, but it’s starting to add up.
Education property taxes in Okotoks will go up by 12 per cent this spring and should result in an average $98 increase on the typical home tax bill. This comes after a 5.5 per cent increase – $85 for the typical home – in the Town’s share of property taxes in December and a big jump in what the Foothills Foundation is asking from Okotoks this year. Okotoks residents living in a home valued at around $400,000 could be facing a tax hike of close to $200 this year as a result. Okotoks taxpayers’ property tax bills rose by $120 on the average home in 2011.
Town councillors say there’s little they can do to limit the provincial government’s share of the tax increase.
Okotoks Mayor Bill Robertson said the Town can’t anticipate what the increase will be each year.
“It’s very unpredictable, depending on resource revenues, depending on any number of different things that the Province does with the school requisition,” he said.
Last year, the tax bill on a typical home in town came out to $2,650 and about one third was provincial education taxes. A typical home in town is identified as a two-storey house, with an attached garage, between 1,400 square feet and 1,600 square feet valued at $390,000.
Robertson said the Town would have to make big cuts to cover the cost of a 12 per cent increase in the education taxes, something he said residents do not support.
Education taxes for each municipality across the province are based on property values and the maximum increase to any municipality is 12 per cent.
The Town has seen its education taxes increase by 12 per cent since 2005, due to its high growth rate. Education property taxes also went up by 12 per cent this year in Airdrie and Leduc, both of which join Okotoks on the list of the 10 fastest growing communities in Canada between 2006 and 2011.
Education property taxes only cover 30 per cent of the costs of kindergarten to Grade 12 education and the remaining 70 per cent is covered from other provincial revenues. The funds are then put into the Alberta School Foundation Fund, a dedicated funding pool for education, and then distributed to school boards on a per student formula.
Alberta Finance spokesperson Jerry Ward said this system has been in place since 1994 to ensure an equitable funding source regardless of the wealth of individual municipalities.
The Town is also seeing a significant increase in what the Foothills Foundation is asking for this year. The foundation’s requisition to its six member municipalities jumped 31 per cent this year, up to $1.9 million. In 2010 the requisition increased by 38 per cent.
Robertson said the provincial government should play a larger role in funding the foundation.
He said the Foothills Foundation, which operates seniors and affordable housing in the region, gets the bulk of its funding from property taxes and it’s more appropriate it come from general provincial revenues.
“It’s a social program,” said Robertson. “I’m not saying municipalities shouldn’t step up to the plate and provide something. When you get that big increase, it is for basically providing social programs, rental assistance and low-income housing. It would be good if the provincial government stepped up and provided that funding.”
Coun. Stephen Clark said the provincial government should align its budgetary processes so municipalities know how much they will be asked to collect for education taxes in the fall.
“We should ask for structural changes in the sense that we should co-operate with the Province so we can get our funding arrangements in the fall,” he said.
Under the Municipal Government Act, the Town is required to have a budget in place for Jan. 1. It is possible to set an interim budget and change it later in the year when they have the final figures from the Province. Okotoks has approved interim budgets in the past, but doesn’t any more.
Clark also said the Town has repeatedly seen large increases in recent years and he said the funding formula should also be re-evaluated.
Ultimately, he said the Town does what it can to limit its tax increases and the provincial government needs to do more on its end.
“I think the Province needs to exercise fiscal restraint, which they haven’t been,” he said.
Town council is scheduled to consider the final tax bill at its April 23 meeting. Property assessment notices will go out in mid-March and tax notices will go out in mid-May.
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