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Mayor takes Redford to task over tax hike

Mayor Melissa Blake isn’t taking the province’s property tax hike lying down.

She’s written a letter to Premier Alison Redford expressing the city’s disagreement with the province’s move.

The government recently eliminated a cap on education property taxes, which are collected by the city but set by the province.

As a result, homeowners in the municipality will pay about $408 more this year, and see a similar increase next year, so that the province can take in an extra $16 million – making Wood Buffalo residents pay the highest education property taxes in the whole province.

By comparison, payments from Edmonton will go down $1 million, and Calgary will pay $8 million less.

“We dispute your assertion that elimination of the cap brings equity to to provincial taxpayers,” the letter reads, “as the burden on RMWB taxpayers will further increase to levels far greater than Albertans in other municipalities.”

That burden is due to the high property values in the city; a situation the province promised to address in 2011 through the creation of a land bank (the Urban Development Sub Region) which has still not been created.

“As a direct result of the Province’s consistent inability to release land to our municipality in a timely and realistic manner, real estate prices in the RMWB are the highest in the province, a situation directly due to the artificial shortage created by the province,” the letter continues.

Although the tax is supposed to pay for education, the extra $16 million coming from Wood Buffalo will not result in any extra funding to local school boards, a major point of concern for the Mayor.

“The Province has avoided serious discussions with local school boards about the need to build new schools and meet existing demand for education services in the region,” the letter adds. “At the same time that the RMWB is being forced to contribute more to the Provincial education coffers, the Province has made cuts to the local education funding.”

The province recently eliminated a grant for the relative cost of purchasing goods, which created bigger deficits for the local boards.

Blake’s letter also notes that local schools “were among the highest rated in the province” when the city controlled its own public education assessment; but now “are rated in the middle range at best.”

“The recent removal of the education tax cap does nothing to improve the quality of our schools and only exacerbates the problem,” the letter concludes.

The Mayor received a unanimous vote from council on Tuesday night to send the letter, with several councilors speaking in favour.

“It is not fair, no matter which way you look at it,” said councilor Russell Thomas. “I understand that they’re trying to solve problems provincially, but it’s had an impact here, and I think this will be heard loud and clear in Edmonton.”

“This takes me back to the Klein era, when we got those Kleinbucks,” said councilor Phil Meagher. “I think it was four hundred dollars per citizen, and now they’re asking for it back. I’m glad I put mine in my pillow; I’ll just dig it up and give it back to them now.”

But Blake admits she doesn’t expect Redford to reverse course.

“I don’t think it’s going to change anything, quite honestly,” she said. “But it does express that when you’re making such significant changes, we expect to be better consulted, more timeliness around it, and not just have it dropped on you months before.”

April 23, 2013

Full Version of Mayor Melissa Blake’s Letter to Premier Alison Redford:

Dear Premier Redford,

The letter from the Ministry of Municipal Affairs dated March 7, 2013, regarding the elimination of the education tax cap fails to address issues of great concern to the Regional Municipality of Wood Buffalo (RMWB). In particular, we dispute your assertion that elimination of the cap brings equity to to provincial taxpayers, as the burden on RMWB taxpayers will further increase to levels far greater than Albertans in other municipalities.

As a direct result of the Province’s consistent inability to release land to our municipality in a timely and realistic manner, real estate prices in the RMWB are the highest in the province, a situation directly due to the artificial shortage created by the province. By linking education tax to a market-based property tax assessment, the Province has created a situation where RMWB tax payers pay the highest education taxes in the province — with no corresponding increase in local education spending.

The Province has avoided serious discussions with local school boards about the need to build new schools and meet existing demand for education services in the region. Money collected from our taxpayers, who are carrying the highest education tax burden in the province due to our high real estate prices, is being distributed to other municipalities in the province and not meeting the existing needs of our community.

By refusing to continue the education tax cap, the Province is increasing inequity with municipalities such as Calgary where property assessments are lower due to the extensive availability of land. A review of the 2012 assessment data from both municipalities shows that the concentration of housing stock ranges in value between $100,000 and $500,000 in Calgary while the concentration in Wood Buffalo ranges in value between $300,000 and $800,000. Using the formulae adopted by your government with the 2013 Budget, education taxes at the low end of the housing market are three times higher in Wood Buffalo than they are in Calgary. This is even more significant in light of the fact that Calgary has the second-highest assessment values in the province, meaning the discrepancies with other municipalities is even higher.

In addition, we are concerned that the Province failed to enter into discussions regarding the impact of the elimination of the education tax cap with affected municipalities prior to the release of the 2013 budget. Such significant change surely requires more time and consultation prior to enacting.

At the same time that the RMWB is being forced to contribute more to the Provincial education coffers, the Province has made cuts to the local education funding. The recent removal of the Relative Cost of Goods and Services Grant resulted in an annual deficit of more than $1 million for local education budgets and this year’s reduction of almost two per cent in the school boards’ budgets will exacerbate the problem. The attempt to meet the demands created by this provincial cut is rapidly depleting local education reserves, as local school boards struggle with a shrinking budget envelope to meet an ever-growing student population and maintain standards for buildings, bussing and maintenance.

Sadly, when the RMWB looked after our own public education assessment, local school boards were among the highest rated in the province. Today, our schools are rated in the middle range at best. The recent removal of the education tax cap does nothing to improve the quality of our schools and only exacerbates the problem.

Sincerely,

Melissa Blake

MAYOR