BANFF – The Town of Banff is taking a big hit in the 2019 provincial budget cuts, including a larger than anticipated school tax grab and reduction in capital grants for infrastructure.
Municipal officials say that the amount the Town levied for 2019 was based on an education tax estimate of $8,294,780, but the final requisition from the province was $8,420,661, leaving a shortfall of $125,881.
Kelly Gibson, director of corporate services for the Town of Banff, said the implications of this and possible solutions would be presented to council during upcoming budget meetings.
“The education tax right now is a concern for us, and while that is not our revenue, it will have an impact on the citizens,” he said during a Nov. 12 governance and finance committee meeting, noting it’s a nine per cent increase instead of the seven per cent levied.
“The Town will sustain that shortfall itself, and then that needs to be re-levied next year to the taxpayers as an education levy, so that will be added onto our education levy for next year.”
Every year the province calculates the amount each municipality must contribute towards the public education system based on assessment value of properties. Municipalities are responsible for collecting the education property tax from all property owners.
In budget 2019-20, the province is collecting about $2.5 billion in education property taxes from municipalities across Alberta.
Gibson said Banff’s increase would be compounded by substantial assessment increases.
“Our equalized assessment from the province is much higher than the rest of the province, so we’re likely to see large tax increases as far as education goes, and likely higher than the nine per cent we saw this year,” he said.
“Those are provincial taxes that are out of our control, but they are likely to be the majority of the overall tax increase next year.”
The Town of Banff is also taking a big hit with the ending of the Municipal Sustainability Initiative (MSI) – a grant program that sees the province give money to municipalities throughout Alberta to fund infrastructure projects.
Depending on what a grant program looks like to replace some of the previous MSI funding from the provincial government, Banff is set to lose $5.6 million in capital funding it was counting on over the next 10 years.
For this year alone, the Town had budgeted just over $2 million from MSI pot, but got a little over $1.1 million. A gas tax top up of $495,000 higher than anticipated, however, means the net loss is $476,000.
Gibson said options would be presented on ways to fund the 10-year plan at budget, getting underway in December.
“We will have some offsetting things that we will bring back as part of the capital budget, both to do with the carry forwards this year and the capital projects coming forward in the 10-year plan,” said Gibson.
“It will affect our ability to close in on that infrastructure funding gap by 2026, but we will be able to display what we are doing to help with that going forward. We will bring back and talk about that during capital budget process this year.”
During Tuesday’s governance and finance committee, Councillor Corrie DiManno thanked administration for the high level overview on possible effects before heading into the 2020 budget process.
“I know we’ve been reading articles over the past couple of weeks and been curious how this affects the Town of Banff,” said DiManno.
“I’m sure as we get into service review and budget we’ll learn the deeper effects.”
