Banff’s 2012 financial plan calls for next year’s property taxes to be limited to an increase of about 1.25 per cent based on Alberta’s projected annual inflation.
The plan also says the commercial-residential tax split will be within a range of 4:1 as a minimum and 5:1 as a maximum, but council can deviate from this target if other factors change in the future.
Banff’s finance committee approved the plan, Monday (June 27), which now gives administration clear direction on key financial policies for preparation of the 2012 operating budget.
The finance committee – made up solely of council – didn’t agree on the tax rate split, but Mayor Karen Sorensen said there is always a chance for further discussion if circumstances change.
“This is a plan, this is what we intend to do, but council does have the right to move outside of that as we did in 2011 because of unusual property assessments,” she said.
It is typical of municipalities across the country to levy a higher tax rate on commercial properties than on residential properties.
In Banff, the municipal tax rate on commercial properties from 1990 to 2006 was typically fives times higher than the residential tax rate, with commercial properties accounting for 80 per cent of tax revenue.
In 2006, the Town implemented a new commercial assessment valuation method that would have significantly increased the percentage of municipal tax revenue collected from commercial properties.
To lessen the impact, the Town moved away from the 5:1 commercial/residential tax split, and in 2011, the split was 6:1, with commercial properties accounting for 76 per cent of total municipal taxes.
Councillor Stavros Karlos argued for a maximum commercial-residential tax split of 6:1.
“I find it difficult to justify to residents, because of assessments, that they would be paying a significantly larger amount year to year,” he said.
“I want to see those increases smoothed out. I’m trying to make it fair and not as dramatic.”
The financial plan outlines key financial policies, such as property taxes, annual cost of living adjustments for town wages, education tax capacity, budget stabilization fund and its plan to fund infrastructure.
