Tax calculations are complicated
Mill rates don't necessarily tell the whole story, James Mason says
Tuesday, Mar 08, 2016 10:15 am
NEW BOWDEN CAO
New Bowden chief administrative officer James Mason says mill rates -- and their relation to the taxes residents and businesses pay -- are misleading.
Mason, formerly of Mannville, near Lloydminster, started his new job on March 1, replacing Andy Weiss, who held the job for nine years.
“Typically, municipalities have different tax rates for residential and non-residential. But there are so many factors in how much we pay in taxes because we all pay taxes somewhere,” Mason says. “When it comes to property tax there are so many variables that just coming up with a mill rate doesn’t really mean a whole lot.
“I know that’s pretty traditional; you (say) ‘oh, this mill rate over here in this town is twice what the mill rate in the next town is,’ but that doesn’t tell you very much, because the mill rate is only the result of a calculation between what the municipality needs and what the value of the property is, and when you do that calculation, you come up with the mill rate.
“So if you have a municipality whose property rates are very low, or their property values are very low, their mill rates would typically look higher. But in fact, the actual amount of tax they pay may not be much more than the municipality down the road,” he adds. “I know it’s kind of simple, but by the same token it’s kind of complicated.”
According to Bowden mayor Robb Stuart, the town has a tough time crafting its budget and keeping taxes low, because 96 per cent of its tax base is residential.
Stuart says a goal for the town would be to increase its commercial/industrial tax base so it could reduce the load for residential property owners.
“That’s a challenge in many municipalities because commercial tax base generally produces more because the asset value is higher. If you have a big commercial enterprise within the municipal boundaries, typically they pay a large amount of tax,” Mason says.
“I guess from a business standpoint, that’s one of the downsides of being a business; you generally end up paying a lot of tax. But again, within a municipality, you can only expect your commercial enterprises to contribute so much, because they’ve got to make a buck too.”