Red Deer City council gave first reading to the tax rate bylaw that, if approved, will see a 3.13% tax increase this year.
The combined tax increase is needed to fund the municipal tax requirement and the requisitioned amounts from Alberta Education and Piper Creek Foundation.
“The City is required under legislation to collect education taxes at the tax rates prescribed by the Province to fund education and that will impact tax increases this year,” said Joanne Parkin, revenue and assessment services manager.
For the 2016 tax year, the City of Red Deer will collect more than $43.7 million in property taxes on behalf of the Government of Alberta to fund education. In accordance with the Property Tax Bylaw, the City will collect $125.1 million in approved municipal taxes to fund programs and services.
“Administration’s proposed municipal tax increase is 2.22 per cent for residential, 1.52 per cent for multi-family, and 3.48 percent for non-residential property, but when you add the education requirement, it results in the same total tax increase for each property type,” said Parkin.
A residential home assessed at $325,000 for 2016 that has experienced the average change in assessed value would pay $7.05 per month more in total property tax. This would bring the total annual tax bill from $2,704 to $2,789, an increase of $85 annually.
“Our municipal taxes are used for services ranging from maintaining our roads and parks, to providing police and emergency services,” said Parkin. “It’s about collecting enough to provide necessary services for Red Deer residents.”
City council heard that 71% of municipal taxes collected stay in the City, 28% go towards the province to fund education and less than 1% goes to the Piper Creek Foundation.
“I think one of the key features on this is that we have been very deliberate in endeavouring to be a business-friendly City and I will also make note of the fact that Red Deer does not have a business tax over and above that and no machinery and equipment tax as well as no hotel tax,” said Mayor Tara Veer. “When you look at municipalities such as Calgary, they do exercise some of those levies.”
The Tax Rate Bylaw will come back for consideration of second and third readings at the council meeting on May 9th.