0% property tax hike made official

By COLLIN GALLANT on May 4, 2021.

cgallant@medicinehatnews.com@CollinGallant

There will be no general change in municipal property tax rates for Medicine Hat this year as council approved a plan to use $832,000 more in reserve spending to make up for assessment values that were hammered by the COVID pandemic.

That amount relates decreasing value of hotel business in mid 2020, and outweighed gains in new construction, and would have required an elevated rate, though council had long signalled they wanted a second year of no tax increase.

“We are providing a zero,” said Mayor Ted Clugston. “Other municipalities are starting to (provide zeros), but I’m not sure how many have done it two years in a row, so I’m quite proud.”

In December, council approved a plan by finance officials to keep the tax rate for this year at 2019 levels, while also reducing the value of bridge payments taken from reserves to make up for a lack of natural gas dividends.

Close to $15 million in spending cuts are required, but the current municipal tax requisition is $78.4 million, meaning a one-year cancellation last year as COVID relief becomes permanent.

The city will however, add an additional $830,000 in reserve spending to make up for what administrators say is a dip in commercial property values last year (on which assessment values are partially based.)

That measure will require a “neutralization” credit” on bills – of $21 for residential bills and $165 on commercial property – to make up for the assessment change, while keeping tax rate the same.

“When the market is poor, assessment values are lower, and the rate has to increase,” said Lola Barton, the city’s head of finance. “We believe that is temporary (to 2020), so that results in zero per cent tax impact.”

Assessment values will be mailed to property owners starting May 7, at which point a 60-day appeal period begins. Taxes are due June 30.

Most of the debate on Monday revolved around Coun. Kris Samraj’s criticism of the relative tax burden paid by the multi-family residential class compared to single-family home owners, which is about 20 per cent more.

Coun. Darren Hirsch was vocal in defence of how the burden is shared, saying that it was a balancing act but one that created tax fairness,