MEDICINE HAT, AB — City Council voted unanimously to increase property tax rates in Medicine Hat for 2017.
Single family homes will see an increase of four per cent this year.
Milti-family dwellings will go up by 5.94 per cent.
Farm land in the city will go up 5.97 per cent, while non-residential property taxes will increase 4.19 per cent.
City officials say a median home with an assessed value of $266,400 will see their taxes go up by $87.58 in 2017.
Broken down that means $65.21 more will go to support city operations, $21.78 of that is the education portion of the taxes and the Cypress View Foundation will get an extra $0.59 this year.
Councillor Bill Cocks said tax increases are something no member of council ever wants to approve, but the city needs to move away from its reliance on oil and gas revenue.
“[NGPR’s] contribution was zero this year,” said Cocks. “So we really had to do some scrambling to come up with a way to balance the books because we cannot deficit finance.”
With the low price of commodities the Natural Gas and Petroleum Resources division has not been paying a dividend to the city.
Without contributing money back, the city has depleted its tax stabilization reserve which was historically funded by oil and gas revenues. That means an annual $23 million budget shortfall.
The city said it has been looking for cost savings and managed to claw back its budget by $7 million, but more will need to be done to offset the large shortfall.
Mayor Ted Clugston said with the large amount of money the city has in reserves it could have put off the tax increase for this year.
Clugston said while that would have made taxpayers happy heading into an election this year, eventually taxes would need to go up and they’d have to go up a lot more than four percent.
“Do we take the [reserve] money now and have the next generation worry about that?” asked Clugston. “That’s what you’re seeing the other levels of government do.”
The new tax rate and mill rate bylaws passed all three readings at the meeting Monday night.
Tax notices will be mailed out to homeowners in May and they will have until June 30th to pay them.
