Property taxes and what drives increases

as the mayor sees it with District of Barriere Mayor Bill Humphreys - Property taxes and what drives increases

The property assessments for 2014 are out. Some of you will notice that the value of your property has dropped.

Since the amount you pay in taxes is dependent on the value of your property, the natural assumption is that your property taxes will drop as the value of your property does. In most cases this will, or may, depending on the will of council, not be true.

The reason for this is the district still needs the same, or perhaps more money to operate each year. To set the mill rate and collect the needed money may require an increase in the mill rate.

Most people view this as a raise in taxes, but really, the property owner may pay the same dollar amount.

Unfortunately, going forward it is very unusual to have mill rates drop when property values go up.

Logic would dictate that if there are no new costs to a well run district then the same amount of money would be needed year over year. The mill rates could be dropped if the property values go up.

In most cases there seem to be cost increases built into the system and the local council is required to either make tough decisions or approve tax increases.

It is not the growth of a community that drives the costs and consequently the taxes up. Quite the opposite actually. As new residents move in, and more homes are built, the tax rolls grow in value.

If the tax structure is well managed, then any extra costs will be covered by these additions.

This also presumes that district development charges are designed to cover any additional load on the infrastructure already in place.

The setting of these charges is a complicated and daunting task at best. If they are too high a developer may take his money elsewhere. If they are set too low then there is not enough money to upgrade things like water systems. In most cases it is not well done, and local governments find themselves scrambling to find the money to provide services to new developments and maintain the existing system.

The whole process could be simple if a town was well planned from the start. The water system would have the right sized wells, the water lines would be properly laid out and sized for growth, and all the other supporting infrastructure would be similarly done with an eye to orderly growth.

This sounds great, but even if things start this way, something always changes.

If a new town council comes in and they want to build high density housing where the original plan was for single family homes the planning process goes out the window before the window is even built.  Similarly, if a new council places more importance on items like building parks and other projects that they feel essential to the social well being of the residents, then the money left over for fixing and improving water systems, roads and the other boring aspects of a town could be very limited.

There needs to be a balance in these issues, and that balance is very hard to find.

New communities are given what essentially is start up money in the form of grants for a few years after they incorporate.

How this money is spent can have lasting effects on the community. If high maintenance projects are undertaken, then the cost of these projects will be with the community for the foreseeable future. The money for these costs comes out of taxes after the grants are gone.

There are more than a few communities that are struggling with ongoing costs for non-essential services, as they find their community tax base shrinking due to residents moving away, declines in property values and the resultant loss of tax revenue.

The District of Barriere is in the process of setting the new water rates based on consumption, and other rates attached to user based services like garbage pickup. I would encourage all residents to check these rates and express your views. Council will also be setting the tax rates in the coming weeks. It is important to have resident feedback on these important issues.