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Column: Why the property tax increase and where does the money go?

Council Report by Salmon Arm Mayor Alan Harrison
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The average residential property in Salmon Arm saw their taxes go up $116.52 this year. Why?

The first thing to look at when examining your tax notice is your Property Assessment Notice. These notices arrive in the mail in early January. Your assessment is based on like-properties in your area and is calculated by the BC Assessment Authority. The average residence in Salmon Arm was assessed at $398.760.

The average residential assessment value increase in Salmon Arm from 2018 to 2019 was 5.91 per cent. Taxes are based on assessment, so if your property assessment, went up more than the average, your taxes will increase more than the 3.3 per cent increase in the city’s budget. Likewise, if your assessment went down, or increased less than 5.91 per cent, your taxes will increase less than the 3.3 per cent increase.

So, where does the $116.52 average increase go?

Thirty dollars of this is a flat increase to the Transportation Parcel Tax, from $120 to $150. This municipal tax is a targeted tax, used to pave and patch our roads. There are 7,977 property parcels in Salmon Arm: 7,977 multiplied by $150 equals $1,196,550. To keep our roads at a reasonable standard we needed to increase the parcel tax this year.

Okay, so $116.52 minus $30 equals $86.52. Where is that money going?

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About $11 went to protective services, fire and police, $8 to roads, $8 to recreation and cultural services, $9 to reserves for future capital works and $4 each to fiscal services and planning and development. The implementation of the Employer Health Tax is largely responsible for the $6 increase in general government services, for a total of $50.

This still leaves about $36; where does that go?

Cities collect Provincial property taxes for schools and hospitals. For a house with the average assessment in Salmon Arm, school taxes increased $11.50. Hospital taxes increased $20.70. Total increase: $32.20. The remaining is mostly attributed to increases in regional district taxes ($1.06) and regional library ($2.85).

So, for the average resident, $80.16 of the increase goes to the city. The remaining $36.36 is sent to other government jurisdictions to support functions like education and health care.

Of course, not all of us have a house assessed at the average value. In 2019, our home was assessed at $528,000. As a result, before the home-owners grant, our property taxes totaled $4,046.05. Of this $2,630.60 was municipal tax and $1,415.45 went to other jurisdictions.

The 2019 budget year was an unusually difficult one. The average tax increase in Salmon Arm over the past 10 years has been 1.88 per cent.

To learn more about city finances, the 2018 City of Salmon Arm Annual Report is on our website: www.salmonarm.ca.


@SalmonArm
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