Red Deer County council is considering boosting residential taxes by one per cent in response to inflation and to blunt potential bigger increases in the future.
Council debated at length whether to hold the line on residential taxes, as is the plan for non-residential taxes, or to go as high as a two-per cent tax rate increase. The rate for farmland taxes, which represent only three per cent of county tax revenues, will go up about 10 per cent.
County number crunchers estimated a typical acreage property assessed at $587,950 — up from $550,000 in 2022 — could expect to see their tax bill go up by about $250, to $3,970, based on increasing property values alone and without any change in the tax rate.
The residential value increase on the sample property was based on an estimated average 6.9 per cent increase in property values, although it varies widely based on property types and locations. For instance, assessment increases are higher in the desirable developments around Gleniffer Lake and Pine Lake.
A two per cent increase would have amounted to just under $300 more on the sample residential tax bill. A one per cent increase will add $274 to the sample bill.
About 60 per cent of the tax bill is the municipal portion and the rest is largely the education requisition plus a much smaller requisition for seniors housing. Requisitions, including money collected for policing, increased 6.35 per cent — or $1.28 million — to $21.4 million in 2024.
Mayor Jim Wood said in an interview shortly after the meeting that council unanimously supported first reading of a bylaw calling for a one per cent residential tax increase that no one wants to see their bills go up.
“But we’re trying to do our best to provide the best services that we can for the dollars we have,” said Wood.
The county has dipped into its savings in recent years to respond to a spike in inflation and other fiscal challenges.
“What we were talking about today was to ensure that we replenish those savings,” said Wood, adding he hoped to hear from ratepayers about what council is proposing.
Coun. Lonny Kennett said given the higher bills ratepayers are facing he could not support a two per cent increase.
“I see it as too much, too quick,” he said.
Kennett proposed the residential tax increase be kept to one per cent. “I can accept that, especially with all of the increases we’re facing.”
Coun. Connie Huelsman said the county has already had to draw heavily on its reserves in past years and a one per cent tax increase now could mean lower increases in future years.
Pointing to rising provincial requisitions, she said “this isn’t just Red Deer County’s taxation problem, it’s coming from higher up.”
Coun. Dana Depalme echoed that concern. “The reality is we can’t control what the province requisitions. They send us an invoice and we have to pay it.”
Depalme said the county may have to tighten its belt by separating wants from needs or by postponing projects to ensure finances remain on track.
Coun. Christine Moore supported the residential increase as well as the freeze on non-residential taxes.
“We really need to keep our competitive advantage in that area. (Non-residential ratepayers) deserve a break because they’ve had a lot of tough years.”
Massier said based on council’s input, he would amend his motion to propose a one per cent residential tax increase, which was unanimously supported by council in passing first reading of the tax bylaw.
“I think one per cent on residential is a fair compromise,” said Coun. Brent Ramsay, adding it could avoid a larger increase next year. “Doing a small increase is better than hitting everyone all at once.”
County corporate services director Dave Dittrick said given the ongoing inflationary pressure on providing services the county is pleased it could hold the line on non-residential tax rates.
“Growth through new construction has helped offset what would have otherwise been a need for a higher taxation rate increase.”
The tax bylaw will go out for public feedback before it comes back to council for second and third readings next month.