Council Takes Less Than A Minute To Give Final Nod To 8.93 Percent Residential Property Tax Increase

Silence is golden.

Or in the case of the City of Moose Jaw’s Council it means a unanimous vote to see residential property owners handed an 8.93 percent tax increase without a pause and further discussion.

At their previous Executive Committee meeting there was discussion with Councillor Kim Robinson opposed to the proposed mill rate increases.

It took less than a minute to unanimously approve the Executive Committee’s mill rates recommendation.

When the minutes from the Executive Committee decision were before Council for approval there was no call for further discussion before being unanimously accepted in a 7 - 0 vote.

There are are also flat taxes or levies on property tax bills paid by all property owners on a per property basis.

The waterworks infrastructure levy is $100 annually and the parks and recreation levy of $65 annually.

Additionally there are other fees going up but they are related to utilities - sewer, water and solid waste. None of utilities appear on residential property tax bills.

In the past sewer services and solid waste were paid for through property taxes later they were shifted to a user pay utility model.

Administration’s mill rate recommendation is based upon a policy adopted by the previous Council of “tax fairness”.

Tax fairness - a policy floated by the Canadian Federation of Independent Business (CFIB) - is reducing the gap that commercial property owners versus residential property owners for property with the same assessment value.

The City has a policy of slowly reducing that gap through “tax sharing” or shifting the property tax burden from commercial to residential properties.

At the present time the gap between commercial versus residential properties is 1.8 times.

When the policy was initially discussed in 2017 the gap was 2.43 times. In 2023 the tax gap between commercial and residential properties was 1.86 times.

By example if a property is assessed at $100,000 and residential property owners pay taxes of $100 then the same property If it was commercial would pay $186 in property taxes in 2024.

What the policy means is commercial property owners will pay more than residential property owners for properties with the same assessment.

The policy remains controversial while Councils have approved a series of status quo budgets plus enhancements the burden to pay for the policy is being shifted to homeowners.

Opponents of the policy would like to see budget cuts by City Hall lessening or even eliminating the tax burden shift on homeowners.

Adopting the tax sharing policy means percentage-wise commercial property owners will see a smaller tax increase than residential property owners.

Commercial properties will still see higher taxes for the same assessment values than residential properties.

The overall property tax increase before the mill rate is set in 2024 is 7.6 percent.

Once the property tax mill rate factors are applied percentage-wise the increase for residential is 8.93 percent and the commercial property tax increase is 5.0 percent.

During budget discussions Council sets an overall percentage of the tax increase - if any.

Later they use tax tools approved by the Province to establish the actual or final property tax outcomes based upon the money needed by the approved budget.

It should be noted that coincidentally the majority of the $3,821,445 in rising tax arrears is from residential properties.

Prior to the pandemic the majority of the tax arrears were from commercial properties.