Red Deer County trimmed tax rates on Tuesday, but most residents can still expect modest tax increases, predicted Mayor Earl Kinsella.
The county approved new tax rates — or mill rates — that will lower slightly the rate applied to assessments for residential and non-residential properties. The tax rate applied to farmland will go up slightly.
Kinsella said the county tries to keep its increases in line with inflation costs. Failing to keep pace with costs doesn’t pay off in the end. It forces the county to play catch-up at some point or chop services to meet budget.
“If inflation goes up and you don’t increase your revenue, then obviously your services go down,” he said.
Terryl Allen, the county’s director of corporate services, said it is difficult to predict an average tax increase for residents because assessments vary so widely across the county. The average assessment increase was 13 per cent as of July 1, 2008, the date property values were set.
Based on the average assessment increase, a $400,000 property in 2007 would be worth $452,000 last July. The tax bill this year would be $1,454, up $98 from the previous year.
The average increase estimate was questioned by Councillor Reimar Poth. Private property assessments he had done showed a decrease between the summer of 2007 and the spring of 2008, not the increase projected by the county.
County manager Curtis Herzberg said the county bases its assessments on property sales data and there are strict rules under the Municipal Government Act on how that information is compiled.
“We’re quite bound by provincial legislation.”
Several councillors pointed out that when assessments were determined last July, the economy had not turned down sharply yet. If the meltdown continues, it will show up in assessments this July.
Exactly where tax bills will end up remains cloudy because the province has not yet told municipalities how much must be collected for education taxes. Each property tax bill includes a municipal portion, set by the county, and the education portion, which is determined by the province.
Council unanimously approved first reading. The tax rate bylaw is expected to come back for final reading on May 5 and tax notices would be sent out several days later.