Lower property assessment doesn’t equal a drop in property tax

“In general, assessed values may go down but the cost of operating the city doesn’t change.” ~ Mayor Mike Martin

Property taxes are based on what’s needed to operate a municipality – the annual bill isn’t solely based on property assessment.

That means landowners won’t see a lower property tax bill just because Trail land assessments have dropped up to $10,000.

“In general, assessed values may go down but the cost of operating the city doesn’t change,” explains Trail Mayor Mike Martin. “As a result of that, there is change to the mill rate.”

In fact, Trail council is now tackling a 2.36 per cent tax increase during its first round of budget review.

“We gave staff a directive a month ago to see what they could do to bring back a budget at less than 2.5 per cent, so they’ve actually been able to do that,” Martin said. “It’s a good starting point, but now we have to go through all the details and the implications of that.”

The annual assessment roll is a tool that is used to distribute taxes between taxpayers and not necessarily to set the level of taxation or changes in taxes, says Ramaish Shah from the Kootenay Columbia region of BC Assessment.

“The assessment is used by the municipalities to apportion taxes across different property owners,” he told the Trail Times.“But any change in the level of taxation is up to the municipalities themselves.”

Although overall home assessments dropped throughout Trail, Shah confirmed the city’s assessment roll remained relatively stable at $1.106 billion compared to $1.123 billion in 2015.

Market fluctuations are a major contributing factor to changes in assessment for the various categories that include residential, light and major industry, utility and commercial properties.

Ideally, the city likes to see real growth in the assessment roll, said David Perehudoff, Trail’s chief administrative officer. “In this regard, as costs increase, the current property tax base is required to absorb the costs,” he added. “There is no opportunity to reduce the costs by spreading it out to a larger assessment base that comes with growth.”

The lengthy budget process, which includes an operating increase of $280,000, began at Trail City Hall on Monday in the governance and operations committee meeting.

The three largest departments, public works, transportation, and recreation, absorb almost 50 per cent of the budget but have yet to be considered, Martin clarified.

“We haven’t tackled those yet,” he said. “So we have tough decisions to make with regard to services provided and how we can more effectively deliver those.”

Property tax increases in Trail sat just above the country’s average inflation rate in 2015, at 2.46 per cent or $25.46 based on the average residential home valued then at $182,679.