Property Tax Arrears And Payment Plans Take Year Of The Pandemic Leap

The amount of property tax arrears took an expected year of the pandemic jump but measures taken by the City to lessen the blow are a silver lining in the bad news Council was told on Tuesday evening.

“Certainly our arrears are up somewhat from 2019 but one of the things I want to note is arrears with payment plans have actually increased significantly,” Director of Finance Brian Acker told Council on Tuesday evening. “We were at $117,000 in 2019, we are now at just over $524,000.”

Acker said Council relaxing the rules to allow property owners to get on the arrears payment plan had led to a significant number of people entering the program which is good for both the taxpayer and the City. The arrears payment program has scheduled payments to make up for outstanding taxes - Tax Installment Payment Plan Service (TIPPS).

“So it certainly benefitted them and it benefits the City as well because we have regularly scheduled payments with them,” he said.

Despite the arrears payment plans in 2020, the Year of the Pandemic, property tax arrears on December 31st grew by 43.716 per cent versus the same date in 2019.

Total arrears amounted to $1,510,021 on December 31, 2020 versus $1,050,698 on December 31, 2019 continuing the trend of growing arrears. (see chart below)

SOURCE - City of Moose Jaw Quarterly Report

In a question from Councillor Crystal Froese for more details about the arrears payment plans Acker said the arrears were up but the majority of taxes have been collected.

In 2019 96 percent of the $40 million in taxes the City levies - both City and School Board taxes - were collected with four percent in arrears and in 2020 the tax collections had slipped by a further two percent to about 94 percent, Acker said.

“So there has been an increase certainly but we expected that with the pandemic,” he said, adding “but it certainly isn’t to the point where we would be overly concerned at this point. And certainly the ability to get people on payment plans really helps alleviate (problems) on both our side and their side as well.”

Despite reassurances the collection of property tax arrears is not something to be overly worried about the arrears have been growing on an annual basis. (See graph below)

On December 31st, 2013 total property arrears were $278,614 but grew to $376,516 on the same date a year later - a 35.14 percent increase.

On December 31st, 2014 total property arrears were $376,516 but grew to $397,074 on the same date a year later - a 5.46 percent increase.

On December 31st, 2015 total property arrears were $397,074 but grew to $445,736 on the same date a year later - a 12.25 percent increase.

On December 31st, 2016 total property arrears were $445,736 but grew to $591,111 on the same date a year later - a 32.61 percent increase.

On December 31st, 2017 total property arrears were $591,111 but grew to $934,059 on the same date a year later - a 58.01 percent increase.

On December 31st, 2018 total property arrears were $934,059 but grew to $1,050,698 on the same date a year later - a 12.48 percent increase.

On December 31st, 2019 total property arrears were $1,050,698 but grew to $1,510,021 on the same date a year later - a 43.71 percent increase.

From the initial $278,614 of property tax arrears on December 31st, 2013 the total tax arrears grew to $1,050,698 on December 31st, 2020 or a 441.97 percent increase over the eight year period.

Annual Total Property Tax Areas on December 31st - 2013 to 2020 - MJ Independent graphic

At the post Council media scrum Mayor Fraser Tolmie was asked by MJ Independent about the growing arrears.

Mayor Tolmie pointed Council’s decision to deter property taxes and penalties from July to September as well as easing the rules to get property owners in arrears on a payment plan as positives during the pandemic.

“One of the positive things last year during the pandemic we deferred taxes and also raised the profile through communications for people being able to pay monthly so that has increased, so that is a highlight and we are going to pay attention,” he said.

Asked about if he was concerned about the trend of growing tax arrears over the past decade he said the City would pay attention to the situation going on to state an anticipated uptick in local economic activity should help pay property taxes.

“We will see if this is a trend and we will pay attention to that. We are very excited with things that are going to be coming in the future,” Mayor Tolmie said.

“We have talked about the SaskPower power plant, we have more businesses doing things like looking at business licenses and that. So again we know last year was a tough year, we have responded and we will pay attention to that.”