Residents of Bonnyville will see an increase on their municipal tax bill this year, but none of the extra money exiting taxpayers' pockets will be staying in the municipality.
Instead, the cash collected will be going directly to the provincial government, as part of an increase to the Provincial Education Property Tax, stemming from the latest provincial budget.
Bonnyville Town Council discussed the changes at its April 9th meeting.
Mayor Ernie Isley explained, “The decision that was made (at the last council meeting) was to hold the municipal component of the tax bill at a zero (per cent) increase, like we did last year. But this increase in education tax will be passed on to the taxpayer.
“So any increase that the taxpayer faces this year will be entirely cash grabbed by the province.”
Coun. Jim Cheverie was not pleased with having to “essentially collect taxes for the province.”
“I seem to remember Premier Redford saying there would be no new taxes. Are these not new taxes?” questioned Cheverie. “Now the province is asking for more taxes by getting the municipalities to collect them. In my view, if it's tax going to the province, they should be the ones collecting it.”
The increase to the education property tax is based upon the growth or contraction of a community, with Bonnyville seeing significant growth in its non-residential sector, which translates to a considerable increase to education property tax paid by non-residential properties.
The province is requiring the Town to pay $374,935 more this year for its non-residential education tax – a 42 per cent increase from last year's assessment.
However, residential properties will only see a minor increase to their tax bills, with the Town facing just a 2.5 per cent increase to the residential education tax.
The spike in non-residential taxes is a result of the Province's elimination of the mitigation formula from this year's budget.
The mitigation formula was previously used to average all communities over four-year periods of equalized assessment changes in order to ease the impact of any significant one-year change.
Town CAO Mark Power wrote in a letter to council, “Had the mitigation formula been in place for 2013, the non-residential education tax would have softened the burden of the $374,935 increase by $270,448.”
Coun. Gene Sobolewski wondered, “This increase in taxes is going to have the biggest impact on commercial and industry in Bonnyville. Will this have an affect on investment in Bonnyville?”
Isley pointed out, “The government said the budget would not be balanced on the backs of taxpayers. We've seen the STEP program cancelled, clawbacks to universities and colleges, teachers salaries frozen, cutbacks to pharmacies, and now this…You can send your thank-you letters to your MLA.”
The mayor also questioned whether the tax revenue would go towards education, or instead be put in general revenue or towards the deficit.
Alberta's Municipal Affairs department did not respond to inquiries made by the Nouvelle regarding the intended use of the education tax revenue.
