Banff residents and businesses will see a 3.89 per cent overall property tax increase this year.
On Monday (May 12), Banff town council passed the tax rates using a 4.96 to one commercial-residential tax split to share the tax burden evenly between the two sectors. Tax bills will be mailed out by May 30.
Council chose to occupy a portion of an unexpected small decrease in the provincial school tax levy to keep the overall tax increase at 3.89 per cent as previously budgeted. This additional municipal tax levy of $89,363 will be transferred to general capital reserves.
“I think it’s a reasonable tax increase based on the level of service we were asked to provide,” said Mayor Karen Sorensen.
The 3.98 per cent increase includes the municipal tax increase (71.8 per cent of the tax bill), provincial school tax requisition (26.8 per cent) and the Bow Valley Regional Housing tax levy (1.4 per cent).
An average residential property assessed at $638,200 could expect a $128 tax increase on the 2014 tax bill. An average commercial property valued at $3.86 million will see an increase of $2,619 this year.
Chris Hughes, the Town of Banff’s senior accountant, said these changes in tax bills are average and do not reflect individual property tax charges.
In fact, he said, there was quite a range of changes in assessed value, depending on the type of property, especially in the commercial sector.
“A property that has seen a higher than average assessment increase will see a greater than average increase in their tax bill, and a property that has seen a lower than average assessment increase will see a lower than average tax increase,” said Hughes.
Banff’s financial plan identifies between four- and five-to-one as the ideal tax rate split – the number that establishes how much of the municipality’s taxes comes from commercial taxpayers and how much from residential taxpayers. Council set this year’s split at 4.96:1.
This year, the municipality saw a two per cent average increase in taxable residential assessments, from $1.23 billion to $1.25 billion, and a 20.4 per cent increase in the average taxable commercial assessment from $661 million to $795 million.
The overall taxable assessment for the Town of Banff increased by 8.4 per cent from $1.89 billion to $2.05 billion.
Hughes said this trend of relatively large increases in commercial assessments and relatively flat residential assessments means there’s a need to reduce the tax split from 6:1 down to 4.96:1 to share the tax burden evenly between commercial and residential.
In addition, he said there was a slight reduction in the amount of money the Town of Banff has to send to the Alberta government for the provincial education tax requisition from 2013 of $114,363 to $5,635,261.
A key financial strategy for council and the Town of Banff is to use any annual savings provided through the provincial education tax levy for municipal infrastructure renewal. Council decided to increase the transfer to general capital reserve by $89,363 to $2,927,963.
