The city is looking to inquire about $1 million in potential funds available from the province from unpaid taxes, traffic fines.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
City council will make formal and informal inquiries about $1 million the province could make available to the municipality from the government’s unpaid portions of local property tax and traffic fines collected in the Hat.
Thursday’s meeting of the corporate service committee dealt with a recurring item to write off bad debt from the province, which now only pays about half its local property tax bills.
In a walk-on item, committee members endorsed making a request for Alberta Justice to return a greater portion of traffic fine revenue generated in the city “in light of provincial budget surplus.”
“That is going to continue into 2023,” said corporate services director Dennis Egert.
In 2019, the province battled a budget deficit by increasing Alberta traffic fines but decreasing the share it remits to the jurisdiction where the offence took place.
Also that year, the province began decreasing the amount of cash it pays to towns and cities to cover local property tax bills.
That amount in Medicine Hat in 2022 will total $517,800, which is to be written off as bad debt and be recovered by the general tax base next year.
Elected officials have long said the system is unfair, burdens other taxpayers and the fine issue also puts burden on local government to use tax income to pay for policing.
“Well, we do have a new MLA in town,” said committee chair Coun. Robert Dumanowski, referring to Premier Danielle Smith, now also the MLA for Brooks-Medicine Hat.
“Perhaps we could discuss this at some point.”
Smith has spoken at length since winning the United Conservative leadership last month about plans for a budget surplus, which is now said to be $12.3 billion. Half would be designated to pay off debt and build the Heritage Savings Fund, and the rest would pay equal parts of an infrastructure program and affordability measures.
On the property tax issue, local elected officials have said the province’s move to reduce payments has been unfair since it was first employed on housing properties in 2016.
Other properties, like the Medicine Hat Court House, remand centre and the provincial building, belong to the non-residential property tax class. Those saw a grant reduction of 25 per cent in the 2019 tax year, then 50 per cent in three years since.
This year’s reduction, $517,800, will technically be considered bad debt and will be recovered by adjusting rates on non-commercial property class in the 2023 tax year.
“It’s the remaining tax base that picks it up,” said Egert, who said that changes to fine revenue are having an effect as well.
In 2019, the province increased the share it keeps from traffic fines from 30 to 40 per cent. About $4 million in fine review specific to Medicine Hat was collected in total in 2021, of which $2.4 million was remitted back to the city.
That money goes into general revenue, said Egert, but the police budget is also funded out of general review, making the arrangement simply one of accounting.
If the previous 40-60 split was restored, it would equate to an additional $400,000 for the city.
At the Nov. 7 meeting council voted to consider a request to join the City of Lethbridge in advocating for the fine revenue issue to be visited.
The property tax situation arises due to a legal technicality in that cities and towns do not have the authority to levy a tax on a higher level of government.
The province has typically covered property tax amounts that would be owing on its buildings by providing a grant that would equal the bill.
