Trail’s flat tax will be doubled this year as a way of levelling the field for all property owners.
City council made the decision during the Monday governance meeting following considerable deliberations, including the potential impacts of raising the current $130 flat tax to $260.
“The sole purpose of the flat tax is to provide greater fairness and equity in recognition that there is a base utilization of general municipal services, with the major elements being recreation, public works, protective services and capital,” explains Trail Mayor Mike Martin. “It’s being used for general municipal services in recognition of the fact that every residence in Trail utilizes a component of those services.”
The impetus behind the change this year, is the wide disparity in 2016 property values reported by BC Assessment.
Depending upon the Trail neighbourhood, home assessments decreased up to 10 per cent or increased as high as 20 per cent - which leads to a disproportionate swing in 2016 property tax levies.
After reviewing assessment implications on individual properties, Trail council directed staff to investigate options for varying tax apportionment.
“I spent a lot of time reviewing the taxation matter, and the one part that was concerning for me, was when we were looking at a large proportion of homes in Trail that would actually be paying less in 2016 for essentially no change in service,” said Martin. “And then we’ve got other properties paying 20 per cent more and that’s when alarm bells started to go off and of course, this ties back to the assessment role.”
Instead of certain homeowners bearing the brunt, property tax fluctuations are somewhat evened out by increasing the flat tax in every household.
Sharing the cost results in a $64 increase for the average residential taxpayer in 2016.
While Martin concedes it’s not a “perfect” approach, in the end it is fair.
“It’s the one scenario that really addresses those original concerns that came forward,” he said. “The addition of $130 to parcel tax really creates some compression of the expanded differences we were seeing.
“Then we are still applying a taxation rate to each property but that mill rate will be less than what it would have been otherwise.”
The flat tax, which began a number of years ago to pay for the city’s water treatment, will be considered again next year come tax season, Martin added.
In the meantime, Trail council has requested a BC Assessment representative meet with the city to explain what happened in Trail this year.
“We went back and had a look at the past four years of taxation levels and they are pretty constant on any one home without modifications,” Martin said. “All of sudden this year, we are seeing these $10,000 to $15,000 swings and we want to know why.”
Council’s Financial Plan Bylaw will be advanced for the first three readings at the regular meeting on April 25, and up for final adoption May 9.
The budget presentation, including property tax apportionment, is available on the city’s website, Trail.ca.