Changes to provincial requisition for educational property tax collection will mean higher bills to Medicine Hatters and residents of Cypress County in 2020.--NEWS PHOTO COLLIN GALLANT
cgallant@medicinehatnews.com@CollinGallant
Property owners in southeast Alberta will see some of the highest education tax increases in the province in 2020, according to changes in this week’s provincial budget.
Each year the province tells municipalities how much the Education Fund requires, and it is up to cities, towns and counties to adjust local rates and collect on their behalf as part of property tax process.
Those funds are forwarded to the Alberta government to partly fund the education budget, and this year the total from the entire province will rise by $102 million.
Specific to local government, the difference in the “Education Requisition” is 8 per cent in Medicine Hat, while Cypress County has to collect 10 per cent more from residents and businesses.
The provincial budget describes the difference as a recalculation accounting for population growth and inflation, but several municipal leaders across the province took issue.
“Let’s call this what it is: a tax increase that’s making life more unaffordable for Albertans,” said Barry Morishita, the mayor of Brooks and head of the Alberta Urban Municipalities Association. He said it amounts to a tax hike “downloaded to municipalities to collect as part of municipal property taxes. It’s unacceptable to municipalities, and to our residents.”
The office of Mayor Ted Clugston did not respond to a request for comment.
City hall finance officials confirmed the amounts to the News, but stressed the Education Requisition is set by the province, and the city only “flows through” funds to the provincial treasury.
Municipal leaders have often complained that citizens see them as the culprit when the provincially-set education portion rises.
In reverse fashion, conservative commentators have criticized cities that have raised municipal tax rates over the year while the education mill rate as dropped as a percentage of total tax bills.
The change will result in local property taxes covering about 31 per cent of the province-wide Education budget, or $2.56 billion, which is stated as being “closer to historic values.”
“The requisition was set based on Alberta population growth and inflation, and will continue to be reviewed annually,” the budget states.
Similar increases are forecast for the next two years.
Part of the local effect will be muted by growth in the tax assessment base.
Medicine Hat’s expected assessment growth will absorb about $1 million in lower provincial grants and revenue sharing in the 2019-2020 budget.
That’s wholly due to Alberta Municipal Affairs’ decision that cannabis production facilities are fully taxable, which leaves the expected municipal tax increase for Medicine Hat for 2020 at the budgeted 3.5 per cent.
Specific to Medicine Hat, the education requisition rises by a total of $1.98 million, to sit at $25.3 million, which is portioned differently to residential and commercial property classes.
Homeowners as a whole will need to pay six per cent more, while there would be a 13 per cent hike for business properties.
The overall increase of eight per cent is the highest of any of the province’s 19 cities, according to the new comparison report for 2020, released Thursday.
Airdrie and Beaumont see seven per cent increases, and Grande Prairie, Lethbridge and St. Albert will rise by six.
Edmonton’s overall changes by five per cent, Brooks by three and Red Deer two per cent.
In Calgary, residential bills will rise by 4 per cent while commercial tax base sees a reduction of seven per cent. That leads to a net result of no change over the entire tax base.
The requisition to Cypress County is now just over $15 million in 2020, representing a 10 per cent increase.
That is heavily weighted to non-residential accounts, which will see 11 per cent increased requirement, while residential and farm accounts see a change of 5 per cent.
Mill rates are adjusted against the assessed value of a property so that the set amount is collected when the assessment roll is completed each spring.
The change in Redcliff is four per cent and Bow Island’s is 9 per cent. The County of Forty Mile’s increase of $62,000, is the result fo an 11 per cent increase to residential classes, and three on the commercial assessment.
