Council approves property tax cut
Council is giving Wood Buffalo a small tax break. During their Tuesday meeting, councillors voted to drop the 2016 property tax rate by two per cent below 2015 levels.
The vote came after council approved the 2016 – 2018 Fiscal Management Strategy Update, whose economic forecast is partially based on the 2016 property tax rate. After the presentation Coun. Sheldon Germain moved to pass an amendment to the bylaw to lower the tax rate.
“I think it’s the right balance as it gives all members of our community a small break this year,” Germain said.
Germain acknowledged the decrease would not help with the municipality’s current cash flow problems, but said that, after consulting with administration, it would not affect the core 2016 budget.
The decrease offsets, to a small extent, a provincially-mandated increase in property taxes collected to fund education in Alberta. The increase is equivalent to a six per cent increase for residential tax brackets and two per cent increase for non-residential tax brackets, such as oilsand sites.
There are five property tax classes covering the municipality. In 2015, the urban residential mill rate was 0.0018110, while the rural non-residential mill rate was 0.0177470.
Chief Financial Officer Elsie Hutton said the municipality already has an unexpected $77 million in extra property tax revenue, and the tax cut could come out of that sum.
The tax cut reduces this revenue to $46.5 million, which was directed to the Emerging Issues Reserve on administration’s recommendation. Philip Schofield, director of assessment and taxation, said the extra revenue was intended as a safety net in case the municipality loses scheduled tax appeal cases.
The amendment found widespread support on council and the amended bylaw passed unanimously.
During a council recess, Hutton could not immediately say what the tax rates would work out to for the different tax classes, such as urban residential, since the education tax made up a sizable portion of the overall property tax compared to the municipal tax.
The tax levied on each residence is based on a property assessment made on Dec. 31, 2015, regardless of what happened to the home during the fire in May.
Typically, residents must pay tax within 30 days of the tax notices being sent out. However, this time there will be no penalties for outstanding payments as long as they are made before January 1, 2017.