Friday, February 11, 2011

Municipal Taxation and the impact of ASFF and Seniors Funding.

One of my readers send the following question to me via email. "Dean I am sitting here trying to read last year's mill rate bylaw, I can't figure it out. Can you explain to me what the Municipality actually collects of the taxpayers and where it goes. Also if I am understanding the news right, the municipality is stating that the budget did not go up this year, so does that mean my taxes will not rise?"

Answer:

If you grab last years Mill rate Bylaw #794 (available on the municipal site).

You will see under the third whereas it states that $6,432,821 is to be raised by general municipal taxation.

Then the next whereas refers to the Alberta School Foundation Fund which was $2,366,925.

Under that you will see Seniors Foundation which was $184,542.

So what the municipality does then is collects on your tax bills the total of the three sums above
$8,984,288.
It then keeps the $6,432,821 for itself and sends the ASFF portion $2,366,925 to the province and the $184,542 to the York Creek Lodge.

Now will taxes not rise because the municipality did not increase its budget? that's not so simple.

If you take the amount above $6,432,821 and go look back at the Mill rate Bylaw for 2009 (#777) you will see that the municipality collected $6,360,015 by general municipal taxation so the increase between the two years was $72,806 which only worked out to a 1.1% increase but your taxes went up 3.2% why?

Well if you look at the ASFF portion for 2010 was $2,366,925 in 2009 it was $2,234,452 so that went up by $132,473 a jump of 5.9%.

Then you look at the Seniors foundation it when from $167,766 in 2009 to $184,542 in 2010 a jump of $16,776 or 10%.

So if you take the total dollars that those three numbers increased from 2009 to 2010, it was $222,055 of which less than one third $72,806 was dictated by the municipality.

So looking a head the only way to guarantee that taxes will not go up is if all three parties to the mill rate do not raise their dollar amounts, what's the chance of that? slim to none.

The municipality as said they will hold their portion to zero, the other two parties the seniors foundation always raises their amount by 10% ($18,454) which they are allowed to do based on the MGA, the province is indicating that it's going to be a tough provincial budget on Feb 24th. Which usually means they down load costs on the municipalities ie. ASFF.

Despite all of that there still is a way for taxes to be kept at zero.

For example if the Seniors take there 10% $18,454 and the ASFF increases $180,000 for a total of almost $200,000 all the municipality as to do is slash three of those new positions which would drop their dollars by $200,000 (or any other means they see fit) then there truly would be no tax increase.

I hope this answered the question.

Time will tell

7 comments:

Anonymous said...

Thanks Dean

I now understand how you can say that zero is not really zero at this point in time.

Larry

Anonymous said...

What is the Seniors foundation? 10% every year, guaranteed.I know it is a small part of the budget, but every 7 years or so , that expense doubles.So today it is costing the taxpayer 2-3% of their tax bill.7 years from now it will be about 5% and so on and so on.....

Crowsnest Pass Home said...

Seniors foundation is funding for the Seniors housing, that looks after the York Creek Lodge and the Tecumesh Manor in Blairmore.

Your right on your concern about the dollars. In 2006 the municipality paid $126,050 in 2010 $184,542 an increase of $62,492.
Maintaining that rate it will be up to $297,207 in five more years.

Anonymous said...

But why the guaranteed 10%?

Crowsnest Pass Home said...

The MGA (Municipal Government Act of Alberta Section 359 (2)) allows them to set their own rate increase up to 10% each year,every year I was on council they went the full 10%.

When I questioned it the Mayor and the CAO both told me there was nothing we could do about it.

Anonymous said...

Wouldn't it be funny if the province stuck it to the municipalities with the ASFF and the tax increase was higher than last year.

Crowsnest Pass Home said...

Well "funny" would not be my choice of wording