City council has approved the property tax rate for this year, coming in with a slightly lower increase than expected. The atrium at city hall is shown in this file photo--NEWS FILE PHOTO
https://www.medicinehatnews.com@MedicineHatNews
Property tax hikes in Medicine Hat will be less than expected and with more money to cut into an operating deficit after council approved rates on Monday night.
Last December council approved a budget calling for a 4 per cent general increase this year to municipal tax bills, but with new construction coming in higher than expected that led to a smaller figure.
Even considering higher property prices, the approved plan calls for a 3.9 per cent increase to residential property classes, including single- and multi-family housing units, such as condos and apartments.
The general increase for businesses clocks in at 2.7 per cent as a way to keep the business share of tax revenue about the same while an additional $508,000 in revenue cuts into an operating deficit – money planned to be taken out of reserves.
“I know nobody likes taxes, but what we hear from the public is about getting value for our money,” said Coun. Robert Dumanowski.
“When I think about the last year or two conditions in the economy and the current state of affairs, I’m actually overly pleased we can keep that down.”
Administrators presented the plan in late April, stating that a larger than expected amount of new construction, especially on commercial class, allowed several options for the tax rate.
They recommended folding half the increase into tax rate (thereby lowering it), and use the other half to add revenue. Even with additional money, the city’s budget calls for $8.5 million in reserves needed to balance the budget.
Council members however, discussed shifting the tax burden.
Coun. Darren Hirsch supported shrinking the budget gap, but also said the large number of residential accounts means the relative increase would be small in a shift but have “more tangible” decreases for business.
As it is, the increase for the average homeowner will total $74 per year and the owners of a $1-million business property, $86.
Couns. Ramona Robins and Cassi Hider said the tax burden for business, with increases slightly, should be considered before the 2024 rate is set.
“I’m a supporter of bringing economy to Medicine Hat and bringing industry here, and keeping it here,” said Hider. “It’s a tough decision but I believe the non-residential guys need a break, not that we all don’t need a break.
“I’d rather see a benefit for them.”
Councillors had debated options last month that might have seen the difference between home and business tax rates close. It currently sits at a 2.38 ratio, meaning businesses pays a rate more than double homeowners, up slightly from 2.32.
“We’ve already approved the pot of money and I want to commend staff for trying to find the balance between residential and non-residential (properties),” said Coun. Andy McGrogan.
Considering only the municipal portion of tax bills, the median single-family home, valued at about $300,000, would be a $76 increase compared to 2022. The change will be $314 more per multi-family property per $1 million of assessed value. Non-residential (commercial or industrial properties) would pay $433 more per $1 million of value.
However, this year the provincially set education requisition was adjusted lower, therefore lowering a one-third portion on most bills, and has promised a freeze in 2024.
The combined result pushes the total impact of tax changes down to $74 more for median single-family houses, $281 more for multi-family housing and $86 more on businesses assessed at $1 million.
