Tuesday, November 22, 2011

The Shell Game

On November 17, I wrote this post: http://crowsnestpasshome.blogspot.com/2011/11/financing-councils-dreams-another-pot.html

Over the last week, I have heard many statements regarding the issue of back taxes:

Lets address some of these comments going back to my original post, remember I said in my mind there are three catergories of taxpayers in arrears.

One being the 50-60% that is owed by a developer, second the people that miss the deadline for one reason or another and have no incentive to pay until the end of the year and third the people that just can’t or struggle to pay.

So back to the comments being made:

1- "The current 10% penalty is one of the lowest in the province and hardly a deterrent". First of all that’s just plain not true if you don’t pay your taxes you get nailed with 10% in June and a further 10% Jan 1st. (By my math that’s 20%)

2- “People are using there money elsewhere by not paying their taxes”. Certainly would not make a lot of sense to be delinquent on a bill that I am going to be charged 20% interest on versus investing the cash in a term deposit at 1-2%.

3- “Yes, some of those unpaid taxes are from developers such as RiverRun etc” How do we determine that? Maybe the problem as been going on for years?. In the audited municipal financial statements there is a section called notes, under that is a sub section titled “Taxes and Grants in place of Taxes receivable” lets look at the last five years.

• 2006-Total $203,669

• 2007-Total $244,727

• 2008-Total $268,400

• 2009-Total $357.519

• 2010-Total $570,581

Notice the numbers don’t really take a big jump until 2009 I think that really reinforces my argument that 50-60% of the arrears are owed by a developer, spilt 2010’s number in half and your almost back to the 2008 number.

4-“ but we have numerous residents who play the shell game every year.” “Numerous” that’s a fairly harsh word, the municipality sends out at least 4500 tax notices a year in my six years on council there was years we saw alarmingly high numbers of people faced with tax sales for being three years behind. Some years as high as 5 or 6. Yes everybody should pay their bills on time but we are not even talking about 1% of our taxpayers going to a tax sale we are talking about one tenth of one per cent. I think once you pull out the number owed by that one developer above you will find that we are very comparative to other communties in Alberta in addition to the historical number for the Crowsnest Pass.

5-Lets assume for a moment we became that unique municipality where everybody paid there taxes on time where would that traditional $40-50,000 in interest income come from?


Anonymous said...

Dean, I think you have made a very good case that the recent increase in back taxes is largely due to the arrears by Bridgecreek (River Run). Blogging councillors (who appear scared to venture out from their own little worlds to other blogs?) have not done their homework with respect to this issue. As a result they have responded with a knee-jerk reaction lacking in understanding, common sense and compassion. Advocating raising penalties from 20% to 50% is usury at its worst, and down right criminal in my mind, especially during these hard economic times. It is also stupid, in that if someone can’t pay facing a 20% penalty, I don’t believe increasing it to 50% is going to change that. Do you? In closing, I do not believe people in this community elected these councillors to go around fleecing the public, especially our poor and down trodden and most defenceless, but instead to build a strong and viable community that cares equally about the least well-off among us, as they undoubtedly do about the elite, influential and powerful. No one living here should be left behind or taken advantage of, as these councillors are advocating. Shame on them and their kind!

btw/ It is my understanding that the additional 10% penalty that takes place on January 1st is based on compound interest i.e. the 10% is based on the original tax amount owing, plus the amount of the first 10% penalty, therefore the actual amount in penalties is greater than 20%, already.


Anonymous said...

I notice in those 2010 audited municipal financial statements, p.15 we are getting only 0.55% interest on our $1,400,000 reserve fund. The 10% we are earning on overdue taxes looks like a great deal by comparison.

BTW, from p.17 it looks like we also have a half million of debt, on which we are paying about 7% interest.

Anonymous said...

Off topic, but have to say,interesting listening to the council claim they know nothing about the automotive and motorcycle repair shop on main street Blairmore, that has been approved. What’s worse, that they do not know what is going on in the CNP or that they are --?Do we not have counslors sitting on the board that approved it?? Do those reps not report back at council meetings? Something is not right here!!! A garage on mainstreet Blairmore? I must have “miss interpreted” the strategic plan.

Anonymous said...

Anon @ 8:03

They are all masters at pissing on our leg, and then while smiling, tell us "it must be raining!"

Anonymous said...

I can't believe you have Councillors down there that don't realize that the municipality is charging 20% penalties on back taxes????????

Anonymous said...


I am curious to see if the municipality appeals this decision.
I believe council will have to vote on that, if they do it will be very interesting to see which way the two councillors vote that were sitting on the board when it passed unanimously.


Anonymous said...

Jack, why would the munapality appeal the decison? They are the ones that approved it.

Anonymous said...

Did you notice the back taxes were such an issue this year they had to cancel the tax sale that was scheduled for Nov 30.


Anonymous said...

What does it mean when they cancel the tax sale? It sounds like the properties owners either paid their taxes or paid enough on them to delay losing their home for a year? If we get 20 percent penalty out of them isn’t that enough?

Crowsnest Pass Home said...


That is what more than likely what happened.

Anonymous said...

So four late payers out of the masses of thousands of tax accounts were scheduled to go to tax sale. All must have come to an arrangement with the municipality because the sale is cancelled. So the taxpayers money eating machine will get the dollars its due plus an extra 20% per year.
It almost sounds like the system is working!

Anonymous said...

The system is working.The problem with this council is they need that money now.They know they have over committed to spending and have to force the issue to get that money so that they do not have to raise taxes in the near term.They know that they will not be reelected if taxes go way up so they see this as addional revenue.However it is only a short term fix and we better all be aware of what is happening when the next election rolls around.

Anonymous said...

The problem is for what ever reason some people do not pay their bills on time.
This happens every where it could be taxes, car payments, utilities etc.
Thats just life for some people.

Now do I think the province is going to change the MGA to satisfy the Crowsnest Pass? Not a chance.

So what if they do, what are municipalities going to do force a tax sale after 2 years instead of three? Whoopee

No different than any other outstanding debt the municipality gets the right to charge interest 20% thats not bad thats a decent return.

Somebody else raised the issue if these people were not paying that 20% how would that lossed revenue be replaced?

Whats a bigger factor for me is even if all these people paid their accounts off in the next month it would be a one time injection of income. That would be lost over the next five years in lost interest payments.

All of these new jobs these guys have put in place or going to we will pay for next year and every year after that not one time.

The old saying goes big government creates more government which in turn creates more and more.

I voted for these guys for one reason only because they were going to keep taxes under control. That is not where I see us going "strategic plan" sounds to me like a fancy name for "bigger government".

I do not want to pay any more taxes because of somebodys big plan.

One frustrated taxpayer.