Tax hike looms to offset assessment slide

The city’s committee-of-the-whole has recommended that council approve the plan to increase the residential property tax mill rate to $6.162 per $1,000 of assessed value.

  • Mar. 9, 2011 12:00 p.m.

The city’s committee-of-the-whole has recommended that council approve the plan to increase the residential property tax mill rate to $6.162 per $1,000 of assessed value.

Because assessed values have decreased by about 4.7 per cent on average, the mill rate was increased by about 4.4 per cent to maintain the same level of revenue: $3,547,121 in total taxation to all property classes.

Mayor Greg Granstrom summarized the recommendation as “the status quo.”

“I’m very concerned about our future needs,” Coun. Kathy Moore said, adding that this and future councils shouldn’t “shirk our responsibility of planning and paying for these infrastructure needs.”

To that end, Moore recommended raising taxes by 1.5 per cent, “just to get a very small increase to the tax payers, so it wouldn’t be very painful, but it would start the process of being able to put a little more aside.”

Coun. Hanne Smith recommended an information campaign to inform the public clearly about the implications of the various projects the city needs.

“We’re going to need to bring taxes up over time.”

Coun. Kathy Wallace recognized the need to put aside money for the “considerable” future expenses, but argued “this community is still suffering from a recession. I don’t feel this is the year to begin a massive reserve campaign and raise taxes.”

She added: “I appreciate the amount of effort staff have put into maintaining property taxation at the level of last year.”

Coun. Laurie Charlton observed that the levels won’t be the same as last year: While the total amount of tax revenue might be the same, property assessments haven’t changed equally. Consequently the increased mill rate will result in a higher tax burden on the 1,410 single family homes that supply 68 per cent of property taxes.

“Because of the decrease in assessments on vacant land and the strata properties, to maintain the same total taxes recovered, single family residences will be paying more,” Charlton said.

His observation is correct. Although the average assessment in 2011 is 4.7 per cent lower, the actual change in taxable value of properties varies from a 19.9 per cent decrease in vacant land and an 11.5 per cent decrease in strata properties, to a 0.3 per cent increase in single family homes.

In effect, after the increased mill rate is accounted for, this means that in 2011 the average strata owner will pay $124 less (a 7.6 per cent decrease), the average vacant lot owner will pay $88 less (a 16.4 per cent decrease), and the typical home owner will pay $73 more (a 4.7 per cent increase.)

Rossland’s 325 business properties will also see an increase of about $10 on average (one per cent) while the 26 recreational and non-profit properties will see a $38 increase on average (5.6 per cent).

Staff pointed out that this is a straightforward consequence of the calculations in the face of assessed values.

The motion to recommend the mill rate of 6.162 was passed with Charlton and Moore against.