Council is deciding to forgo what would have been $116,241 in additional unanticipated property tax revenue this year.
And it’s doing so by adjusting tax rates to reduce the amount of money gathered in that would have been the case because of increases in assessed property values that came in after the projected budget for 2020 was determined.
Local government budgets are set by calendar year beginning January 1, meaning deliberations and preparations begin before then but with the BC Assessment Authority releasing revised assessment data as of the end of March, any changes in property values could then affect property tax projections.
That’s what has happened this year because the 2020 revised tax roll is $20.434 million higher that the 2019 revised roll, finance director Yun Ke Ni outlined in a March 31 memo that was discussed by council at its April 7 meeting.
And because of that, the District could expect that $116,241 additional dollars over and above its projected municipal property tax revenue of $4.258 million.
The finance director did lay out a number of scenarios for council to consider based on the $116,241 unanticipated potential windfall.
More money could be devoted, for example, to paving and sidewalk improvements along with purchasing an insurance policy against cyber attacks, transferring an amount to the public works infrastructure reserve and, in view of financial pressures, removing late payment penalties on property taxes owed.
Ni also outlined another alternative for council to consider — lowering what residential taxpayers would be paying based on the earlier 2020 budget projection.
But that was rejected because that residential reduction of approximately $58,000 would then have to be made up by increases in the other property tax classifications.
Council has now directed District staffers to outline its decision in the form of a bylaw to set tax rates which will then be formally considered at its next scheduled meeting of April 21.
The decision to forgo the anticipated potential increased tax revenue doesn’t mean the District’s general 2.7 per cent increase won’t be going ahead.
That’s what Council had already determined the District needs to account for inflation and specific initiatives planned for 2020 as outline in its 2020-2024 financial plan.
Based on the average assessed value of a single family Houston home, the increase will mean an additional net tax of $16.35 this year.
Houston mayor Shane Brienen said the decision to forgo the unexpected additional tax income was one measure council could take to recognize the financial impact COVID-19 is having on local taxpayers.
“That extra isn’t in our budget forecast anyway. We’re still going to have that 2.7 per cent increase but we did decide to pull back on that additional amount,” he said.
Brienen also acknowledged suggestions the District might consider pulling back on some of its planned infrastructure spending to further provide a local tax break.
But he rejected those suggestions, saying projects such as downtown revitalization and Hwy16 improvements are a key part of the District’s long term strategy to improve infrastructure and the look of the District to attract investment and to attract and retain new residents.
“Since the [Houston Forest Products] mill closure in 2014, that’s been our focus,” he said.
“And now these projects are going to put us in the position of recovery in a post-COVID-19 scenario,” Brienen added.
“When I first became a councillor, in 2005, there were people on council then who said Hwy. 16 was discussed way back in 1986, during Expo, so we are in 2020 and we kept putting it off. It’s something we just need to do,” he said.