WESTLOCK — Westlock County councillors met with Al Kemmere, president of the Rural Municipalities of Alberta, Sept. 16 and topping the list of major concerns was the potential change to linear assessment models.
RMA didn’t have any updates, said reeve Lou Hall. It’s especially distressing since this could be one of the most significant budgetary issues in the last three years for municipalities.
“We have no idea. There will be an impact, we’re just not sure what it will be. That’s unfortunate, because we are starting the budget process in the next little while anyway and we need some numbers,” she said.
Tracy Allard, the new minister of Municipal Affairs, who met with area municipalities Sept. 2 in Smoky Lake, promised municipalities to postpone implementation of any changes until mid-October.
“The concern that we gave to (RMA), first of all, was, and still is, that (the government is) trying to address a tax policy by using an assessment amendment and they’re two different issues. That was our message and has been our message consistently,” said interim CAO Rick McDonald.
“You shouldn’t use one policy to address another policy. If you have a tax issue, then you have to address a tax issue, not use assessments to do that. For example, a pipeline is worth X amount of dollars. Because you now use a different formula, you’ve made it worth less so that the taxpayer has to pay less. Well, that’s not how you do it. It’s what is the real value; assessors will tell you that.”
After the government announced the proposed changes at the end of July, RMA estimated that anywhere from $127-382 million could be gone from municipal coffers if the government moves ahead with any of the four models.
In Westlock County, 42 per cent of the 2019 net municipal tax revenue — excluding requisitions like school and senior housing payments — came from linear properties. In July, the county estimated that residential taxes could go up 24.1-31.3 per cent and non-residential 31.2-44.8 per cent, in addition to service cuts, if any of the models are adopted.
“Raising tax rates to off-set the impacts of the assessment model change will have the effect of simply transferring taxes from the oil and gas industry to other businesses and residents,” wrote deputy reeve Brian Coleman in a July 27 letter to Athabasca-Barrhead-Westlock MLA Glenn van Dijken.
And while the province is attempting to salvage the oil and gas industry, municipalities are trying to remind the government that they’re also seeing an increase in unpaid property taxes from that sector.
“(RMA) have also made it clear to the minister about the unpaid taxes by industry, which is fairly significant for Westlock County, and they’re hopeful that when she starts to see the big picture, that she’ll come back and have a little more dialogue with them,” said McDonald.
The county tries to anticipate each year how much of their revenue stream they’ll lose from unpaid taxes. Since 2018, the amount of uncollectable taxes — marked as bad debts in a budget — has increased from $100,000 to $500,000 in 2019 and $1 million in 2020, which is 8.9 per cent of the total tax levy.
“We are assessing properties that we aren’t able to collect on and … it’s almost impossible to get those assessments off the books. We have to carry this uncollectable, so we budget for it,” explained McDonald.
RMA typically visits member municipalities once every two or three years, and this particular visit was originally scheduled for June 29, but was rescheduled due to COVID-19. What councillors hoped back in May when they changed the date was for an in-person meeting, but the prolonged pandemic forced a Zoom call instead.
Andreea Resmerita, TownandCountryToday.com
Follow me on Twitter @andreea_res
