Red Deer County has held the line on taxes for years but some increases are necessary in the current inflationary climate, said Mayor Jim Wood.
“I believe we’re in a different situation right now,” said Wood on Tuesday, as council debated the bylaw that sets tax rates for the coming year.
“Everyone knows worldwide that we have inflation happening,” he said. “We are in the reality of an inflationary period where we have to start to catch up.”
The proposed tax rate bylaw froze the basic rates for residential, non-residential and farm properties. However, small increases were proposed for levies used to help cover the cost of protective services, such as fire and enforcement, and community services.
Those levy increases will lead to an overall tax increase of two per cent, said county corporate services director Heather Surkan. As well, education taxes, which the county collects on behalf of the province, are going up one per cent.
Wood said he saw the increases as “one-offs” to ensure the county remains on a solid financial footing, and not as a sign of things to come.
The mayor said he was confident that growth in the county would continue and bring with it additional tax revenue for future years.
For years, the county has aimed to freeze taxes. Last year was the fifth year in a row that council did not increase farm and residential taxes. Non-residential taxes have increased once since 2016. In 2018, slight increases to non-residential taxes and to a levy that helps pay for community services were approved.
In light of the economic hardships many residents are still facing, council opted to roll back proposed increases in levies used to help support protective and community services.
Initially, it was proposed that the protective services and community services levies be boosted by one per cent.
Coun. Philip Massier proposed phasing in the community services levy increase over two years.
“Could we not just do the increase a little bit slower,” said Massier, adding there is money remaining in a community services reserve fund.
“If we really don’t need the community service money yet, why are we asking for it?”
Coun. Christine Moore proposed a motion that would reduce the community services and protective services levy increases to a half-percentage point increase rather than one per cent.
“We do have room and it shows we’re responsive to our residents right now. We have emerged from the pandemic but people are struggling or just hanging on.”
Other councillors agreed that tax increases would hit many residents hard.
“We’re just coming out of COVID,” said Coun. Lonny Kennett, who called these “unprecedented times. People are just getting their feet under them.”
Coun. Dana Depalme also wanted to see the increases phased in over two years to reduce the impact this year.
“I think it can be done over a two-year period and see how it goes. For some people, it’s a lot per month.”
Second and third reading of the tax rate bylaw is set for May 17.