On Friday morning, Oct. 25, it was Battleford’s director of finance, David Gillan, who spoke to the Battlefords Chamber of Commerce audience as the Taxes Over Breakfast series shifted to the subject of municipal taxation.
It was a lengthy discussion that included the finance cycle, balance sheets, surpluses and capital spending.
His presentation began with a look at the municipal finance cycle. The cycle starts in January and goes on for 18 months. Budget planning sessions begin in August and budget preparation begins in September, with the budget going to council in November-December for discussion and approval. The tax bylaws are passed around May of the following year and tax billing goes out around May or June.
The financial statements are done at that same time and according to Gillan it is all connected.
“There’s a link between budgeting and financial statements. There’s a link between the next budgeting and those financial statements, it’s called reserves,” said Gillan. “Things that we do in municipalities aren’t done in isolation. They are done with the big picture in mind.”
There was discussion of the tax tools available including the mill rate and base taxes. Gillan pointed out that base taxes are used by many small and medium sized municipalities, but not by Saskatoon or Regina.
Gillan said he has asked officials in the bigger cities why they don’t use base taxes and “they looked as if they sucked a lemon,” Gillan said. The reason cited by those officials was that is it isn’t seen as a fair system.
Gillan gave some examples of what the difference would be between a $200,000 assessed home and a $400,000 home with or without a base tax. With a $1,000 base tax imposed, the tax bill for the $200,000 property would be $2,600. For the $400,000 property,it would be $4,200.
Without base taxes and with everyone paying based on a mill rate, the bill would be $2,267 for the $200,000 property, and $4,533 for the $400,000 property– quite a difference, Gillan noted.
“That is a very small example that is hotly debated about its effectiveness and its fairness,” Gillan said.
