Chris Simpson

Semper letteris mandate

Concerns grow over possible education tax hike

With the loss of the 15% deduction for early payment and an increase in property evaluation, home owners worried that their education taxes are about to skyrocket unless mill rates were adjusted. They had the government’s word that there was nothing to worry about — but then again, they had the government’s word.

BY CHRIS  SIMPSON

MoneyTaxesIf the education mill rates are not properly adjusted, the recent loss of the 15% deduction for early payment along with an increase in property evaluation has some home owners worried that their education taxes are about to skyrocket. According to Shirley Gange, president of the Provincial Association for Resort Communities (PARCS), the hit would be felt strongest by those owning resort homes.

“This has been the year of revaluation,” she told The Advance. “We realize with the revaluation people are now getting their assessments on their properties and they’re going to see some very high increases on what those evaluations are, and they’re higher in the area of resort villages.”

She has nothing but praise for the new standardization of education mill rates. “We really appreciated when the government stepped in and had a common mill rate for education,” she said. The concern comes in what is going to happen this year, unless the government makes some changes.

“Since 2009 when they made that adjustment, every year the education component has increased on residential proprieties, and the fear is this year, unless we let the government know we’re aware of what’s happening, this year … because our evaluations have increased particularly in resort communities, we’re going to see a really significant increase in education in the residential component and specifically in the resort communities.”

Gange pointed to an example provided by Lynne Saas.

“In 2012,” writes Saas, “the taxable assessment on my cottage was $95,000 and the education mill rate for residential was 9.8605 mills.” Her education tax that year worked out to $936.38 minus the 15% discount for early payment, putting her total at $795.92.

This year, however, the taxable assessment of Saas’ cottage has been upped to $153,090, and there are no longer discounts for early payment. With the same mill rate as before, that would put her new education tax payment at $1,501.05, essentially doubling last year’s.

“We’re not really concerned with the high valuations of municipal taxes because in most cases municipalities are going to attempt to lower their mill rates, so there’s a revenue neutral issue,” said Gage. “Our resort communities are hit so hard because their evaluation has gone up.”

A rising evaluation also tends to give the wrong impression of the financial situation of the affected home owners.

“There’s a real misconception there,” Gage told us. “Because your property is now worth twice what it was when you purchased it maybe 15 years ago, that you have the ability to pay. But that’s not necessarily true. For our part, we retired here 13 years ago. We didn’t sell our property and have no plans to sell it. Meanwhile around us the properties are going up, so they’re saying our property is worth more so we have to pay more. We’re on the same fixed income as retirees as we were then.”

So essentially you could pay if you sold your house?

“Exactly. And what’s the point?” she answered, laughing.

“That’s our concern. We’re saying, look, every year you have increased the amount that residential is paying on education taxes. It’s gone up tremendously every single year. And unless they make some changes in the percentage that they’re allocating to residential it looks like we could go up significantly again.”

Looking at the charts provided by PARCS, we notice that the agricultural input is small and has been rapidly decreasing. Why is that, we wonder?

We wondered the same thing. That’s our point exactly. How is it that agriculture, what they’re paying, continues to decrease while ours continues to increase? In 2009 they were paying about 11.5% as their portion. But in two years it dropped in half to 6%.”

The Advance contacted Ministerial Assistant Jared Dunitz who was quite emphatic that “There will be mitigation of the mill rate.” When asked what it might be, however, he said he was unable to give a figure.

“I don’t know the exact number we’re looking at,” he said. “That’s all very confidential right now. We’re going into budget. So I’m not privy to that information. But I do know they’re looking at ways to try to mitigate the increase.”

This, according to Gage, is exactly the problem.

“When we asked for the percentage of 2012 they said they won’t have them until the end of February, and by then it’s too late. They’re making their decisions on what the percentages will be right now.”

Gage reflects a concern felt by many home owners that without knowing how severely the new rates will affect them, their voice in the issue will be muted.

“The best way to force the government to realize that they have to take a serious look and sharpen their pencils is when you have a well-informed public. If everybody sits back and says well I don’t know what’s going to happen and all of a sudden it happens it’s to you it’s too late.”

Dunitz, however, says that PARCS is being heard.

“PARCS actually had a meeting with the minister last week,” he said, “and expressed their concern and gave some examples of communities they’re concerned about. We’re received multiple letters and emails to our office from recreational property owners that are concerned about the increase. The minister, and by extension the rest of the cabinet are well aware of the concern.”

But to Gage and others like her, this perhaps sounds a bit too much like, “We’re the government – trust us.” She insists that they’re not looking for special consideration, but simply the assurance that they won’t get hit with an unjust tax hike.

“We’re trying to make the government treat us fairly. We’re not asking for a break — just treat us fairly and make sure everybody is paying their fair share of education tax. Education tax is not a user pay, everybody pays to support as we do with health.”

Education affects everyone, whether or not they have children in school.

“We all benefit,” she points out.

Originally published in The Gull Lake Advance, Feb. 12, 2013

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