Taxation: Tax Collection

Once the mill rate has been set, the municipality can now prepare and send out its tax notices. 

There is a deadline the municipality must follow in sending out these notices, and a deadline by which those taxes must be paid.  When you receive your tax notice, check carefully to make sure you know what the last possible day is to pay your property taxes. 

Traditionally, municipalities charge huge penalty fees for late paid taxes to encourage folks to pay on time.  This is because the municipality must have the money in the bank when the province comes calling to grab their Education Portion! 

Most municipalities in Alberta have two methods of paying property taxes.  Method One is simply a lump sum payment on or before the tax due date. 

Method Two is much easier in my opinion.  It involves paying monthly instalments throughout the year.  We've been on Method Two for a few years now and it's great!  If you think this might work for you, contact the Beiseker Village Office (403-947-3774) and get the details from them.

If property taxes are unpaid, the municipality has a long and involved procedure to collect them.  The property owner can come into the municipal office and work out a payment plan to cover the amount owing, plus the penalties. 

The municipality also has the right to take the property and sell it to recover those unpaid taxes.  There is a time frame which must be followed.  I believe it's three years.  If the property is seized and sold, the municipality will subtract the amount owing on back taxes with penalties - and then place the remainder of the selling price in the bank. The former owner can apply to have this remainder returned to him.

Municipal Taxation (aka Property Tax) is an important part of keeping our municipalities operating smoothly.  I haven't met one person in my life who looks forward to paying their property taxes!   But almost everyone I meet understands why these taxes are so important to a municipality. 

I hope this series has helped you understand how Municipal Taxation works and why it is so important.

Taxation: Setting the Mill Rate

Step one was the assessment; figuring out how much the entire municipality is worth (the Overall or Total Assessment). 

Step two is building a budget to determine how much the municipality needs to operate for one year.

Step three is setting a mill rate.  Setting the mill rate is really very simple.  All you have to do, is divide what you need into the overall (or total) assessment.  The mill rate is the number of dollars the property owner must pay, per thousand dollars of his property's value, as declared on the assessment.  For example; if a home's assessed value is $200,000 and the mill rate is set at 6.5 mills, the homeowner must pay 200 X 6.5 = $1300 in property tax.

Oops, not so fast!  The provincial government shoves its hand in there, too!  The Ministry of Education tells each municipality how much it will take to pay for education services in the area.  They don't ask, they don't advise, they just tell and take!  Alberta Education simply dips into each municipality's bank account a couple of times a year, and snatches out tens of thousands of dollars each time. 

If a municipality is having difficulty collecting its taxes, this makes the operation of that municipality even harder!  The province takes those funds out - whether or not the municipality has been able to collect them!   If some taxpayers are unable (or unwilling) to pay their taxes, the municipality suffers because it still must make sure it has the money in bank to pay the TOTAL bill for the provincial education portion of the property tax -- even though some of those dollars haven't been collected yet!

When you receive your tax notice, check down to see how much of that is going to the province.  It will be listed there as a mill rate for education.  This is added onto the municipality's mill rate. 

Many Taxes, One Pocket

It's no secret that one of the government's main source of revenue is direct taxation.  Each level of government has been given certain methods of gathering money from Canadians. 

The federal and provincial governments collect income taxes.  Our national government and most provinces (except Alberta) gather sales taxes.  Provinces tax things like liquor and tobacco (so-called "sin taxes"), while the provinces and the federal government both tax gasoline and vehicles. 

Municipalities tax properties - but the provinces have a hand out there, collecting its education portion of property taxes.  There is also the 'trickle down' tax dollars; the federal and provincial governments send a trickle of dollars down to the level (or levels) below them.

It's all very complicated, but what many of our elected MPs, MLAs and municipal councilors might forget sometimes is that all of these various levels of taxes are paid for out of one pocket.

The same person who pays his property taxes also pays provincial and federal income taxes.  The money used to pay property tax, liquor taxes, sales taxes, fuel taxes and  other taxes has already been taxed by the federal government before the taxpayer is even allowed to put his wages in his pocket!

All taxes are paid for out of one pocket; the taxpayers pocket! 

All elected officials; municipal, provincial, and federal, must be constantly reminded of this very fact.

Village Financial Audit

I noted an article in the most recent Rocky View Weekly reporting on our village's financial audit for 2012.  I want to commend Beiseker's village council and the village's staff for managing our village so well this last year. 

The village of  Beiseker has a cash flow problem caused by two things;

•  We still have a huge amount of back taxes owing!   Unpaid taxes have a huge impact on a small village like ours!  The tens of thousands of dollars owing could improve many things in the village, if it were available to us. It is very frustrating to have unpaved streets, broken sidewalks, and other issues within the village - and not having the funds available to address them!
•  The second problem actually comes from the provincial government.  As I've mentioned before, we collect the education portion of the property tax on their behalf.   They in turn withdraw this money from our bank account.  And therein lies the problem.   The province  withdraws the total amount, regardless of how much is still owing to the village by rate payers or has not been collected, yet.  We have no imput - They just take it!

Overall I was very pleased with the results of our 2012 audit.  If we can stay on this road of fiscal responsibility, our village will continue to do well - in spite of two problems I've mentioned.

Bean Counters Report In!

At last week's Village of Beiseker Council meeting, our auditors reported to council on the financial situation of the village at the end of 2011.  It wasn't pretty! 

Two main things contributed to Beiseker's cash shortfall at the end of 2011; the Alberta government's slow transfer of funds and over $300,000 of owed taxes!

1. Slow Payments;  Beiseker had three major projects to pay for in 2011.  They were the Beiseker Airport repaving, Main Street upgrading, and Chinook Crescent repairs.  The first two projects were to be paid for by provincial grants.  But the contractors want to be paid as soon as their work has been inspected and deemed satisfactory.  The Village of Beiseker had to pay the contractors even though the promised provincial grant money had not arrived!   
2. Back Taxes Owed;  As mentioned earlier on this blog, Beiseker has been unable to collect over $300,000 of property taxes even though it must still pay the education portion to the province in full!

Problem number one has been solved; the provincial bucks are here!  But problem number two is still with us.

The solutions;

• The Village will have to borrow some money to pay the bills while we wait for our 2011 tax bucks to trickle in.
• If you are one of those who are having difficulty paying your 2011 property taxes, contact the Village of Beiseker Office (403-947-3774).  There is a good possibility that you can make a plan with the Village to pay those taxes over a longer period of time.
• Village council will likely have to scale back or postpone some projects over this upcoming construction season until we have full funding in hand.
• We will be asking the provincial government (through the AUMA) to speed up future transfers to us and other small municipalities so we might avoid these cash crunches.
• We will also be asking the provincial government (through the AUMA) to consider collecting their Education Portion of the property taxes based on a formula related to the percentage of taxes collected.  

The problems cited here do not constitute a "Doomsday Scenario" for Beiseker.  It is just simply a minor glitch.  But Village Council is determined to make sure we get Beiseker out of this situation before it does get serious.  Stay tuned.

Trash and Taxes

TRASH: After the snow melted from the ditch on the west side of Beiseker Airport, pilots noticed paper and plastic bags blowing across the runway.  We went to investigate.  We found a whole pile of household garbage thrown in the ditch about 400 yards north of Highway #9 along that road allowance!  How would anyone in their right minds confuse a rural road ditch with a landfill site. 

The authorities told me I would have to catch the culprit in the act of dumping it there and get a vehicle licence number in order to press charges.  We (Rocky View County and Beiseker's Public Works) cleaned it up. 

If you ever see a suspicious vehicle with folks throwing garbage from it, get a plate number!

TAXES: As you know, the provincial government adds on an "Education Portion" to your property taxes each year.  We collect it but it's their money!  Today they came to collect their first installment. 

We owed the province $70,000.00! 

But over 20% of Beisekerites haven't paid their 2011 taxes yet!  We still owe the province over $70,000.00!  We paid it, but that payment severely hurt our village cash flow!  Right now there is a little over $300,000.00 of unpaid 2011 tax money owed the Village of Beiseker!  But the province doesn't care - They just want their $70,000.00! 

Those amounts might not seem much if you're looking at a big city, but it sure matters here!  Some of our summer projects may have to be delayed until these back taxes are paid.