The Collection of Taxes

Pipestone Flyer

    If you own a home, buildings or land you will have to pay a property tax to the local city, town or county.  The money is pooled and then each Council, through a variety of planning processes, determines how it will be spent. The most common practice is to have a strategic planning session where the Council determines how the money will be best used to maximize the use of resources while aligning with the mission, vision and values. A strategic plan takes into consideration issues such as future needs; expansion or decline of need for programs, facilities and services; changing funding sources; changing demographics etc..

    It is also critical for any city, town or county to create a business plan to measure how successful the strategic plan is being executed. The business plan is more quantifiable as it identifies and measures each of, (1) the overall role and purpose, (2) how marketing is being planned and conducted, (3) a financial management plan and finally, (4) a business management plan. 

    The County of Wetaskiwin has proven year after year they are very good at this. “Council and Administration Staff attended the Annual 2013 Strategic Planning session held October 29th, 31st, November 22nd, and 26th, 2012 to review long term departmental core business plans, goals and objectives and strategies. The 5 Year Business Plans were reviewed for each department and the 2013 Operational and Capital Budget has been prepared by Administration in accordance with the direction provided during the Strategic Planning session.” 

    Their planning process leading up to the presentation of the 2013 budget to Council on April 19th, 2013 began in October of 2012 when each Department was required to start scrutinizing every facet of their operations to identify potential savings and future needs. 

    Regardless of how diligent the County was, the budgeting process couldn’t be completed until March 7th, 2013 when the Provincial Government budget was received because that budget finally identified what the elusive 2013 Education Property Tax Requisition would be. Alberta municipalities (county, city, towns) will be collecting approximately $2.06 billion from their citizens for provincial education taxes in 2013, resulting in a $79 million (4%) increase from 2012. 

    The County of Wetaskiwin will be responsible for collecting millions of dollars it doesn’t get to use

    Each and every year, property owners can expect to receive a property tax assessment that lists a number of different categories that make up the total amount of property tax the ratepayer will be responsible for. 

    It’s human nature to have your eyes dart down to the bottom of the notice to see ‘how much it will cost this year’. But that final number is misleading in terms of services that can be provided within the County. The County is required to collect the Education Property Tax Requisition, all of which goes directly to the Provincial Government. Of the approximately $26 million in taxes collected by the County, only $18 million will be used for County programs and services. The remaining approximately $8 million will go to the Alberta School Foundation Fund (ASFF) and Alberta Seniors' Foundation Requisition. 

    In 2013, the County of Wetaskiwin will be responsible for collecting $4,582,396.00 from residential/farm property owners, an increase of $463,129.00 (11%) and for collecting $2,770,547.00 from non-residential property owners, an increase of $219,615.00 (9%) in provincial education property tax for 2013. This is property tax money that only passes through the County on its way to the Province of Alberta.

    As stated by the Province of Alberta, “All the money collected through the education property tax goes to fund Albertans' priorities in education. The education property tax is pooled into the ASFF and then distributed among Alberta's public and separate school boards on an equal per-student basis.”

    Property is assessed and taxed in two different categories; residential and farmland, and non-residential. The uniform provincial mill rate is applied to these assessments, and invoices to municipalities are produced. The municipalities then collect the requisitioned amount from the individual taxpayers and remit to the Alberta School Foundation Fund (ASFF). The uniform provincial mill rate used to determine each municipality's share of the provincial education requisition is established by Finance and Enterprise, Municipal Affairs and Education. The mill rate is calculated by dividing the total provincial education revenue requirement by the provincial varied equalized assessment base.”

The County explains changes for 2013

    Commencing in 2013, two significant changes have been made to the Provincial Education Property Tax System. The first change will be linking education property tax revenue to 32% of the target operating costs for funding Kindergarten to Grade 12 education. Using operating costs should mean that the amount of education property tax revenue will be known one year in advance. However, it is believed each municipality’s share of that cost will not be known until the provincial budget is delivered each year.

    Secondly, the Province has discontinued the mitigation formula which reallocated the education tax requisition among municipalities. Each municipality’s share of the provincial education property tax will be based on the current year’s equalized assessment. The system in place prior to 2013, utilized a four year average of each municipality’s equalized assessment as well as a 12% cap on increases. The elimination of the averages and the cap has wide ranging impacts varying between municipalities.

    Although the adjustment period may be challenging for some municipalities this new system appears to achieve greater transparency and fairness. The removal of the mitigation factors should ensure that similar valued properties pay the same amount of provincial education tax, no matter where they are located in the province.