Skip to content

EDITORIAL: The money split

'There’s no question the city needs more land zoned for non-residential if it ever hopes to reduce the tax burden on residents. What we must first determine, however, is what business and residents believe is a realistic non-residential/residential assessment target for our community.'
ourview

The annals of humanity are interwoven with thoughts and musings about money.

"Money is the root of all evil," say some, who likely wished they had more, but would never admit to it.

"Money makes the world go ‘round," say others, who likely have too much, and aren’t willing to share.

Say what you want about money; it is the fuel that drives our lives. Prices are up. Wages are flat. More money, please.

Renowned author and one of the most quotable humans to inhabit this earth, Mark Twain, put it this way: “The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”

While we mere citizens try to cope with our daily finances, government — at every level — has an insatiable appetite for money — our money. There is simply never enough.

The City of St. Albert is not unique in this regard. For several decades now, the city has aspired to ease the tax burden on residents by growing our non-residential assessment (commercial and industrial business). It’s the basis of the mantra “70/30,” which means the city’s target is 70 per cent residential and 30 per cent non-residential.

Today, the city has claimed success in getting to 80/20 on its way to achieving the 70/30 split. But what exactly does that mean? Well, the answer can be found in other terminology: tax (or revenue) split and split mill rates. That may sound complicated, but it isn’t.

The pace of St. Albert’s residential growth has made it difficult to hit the 70/30 assessment target. Residential growth outstrips non-residential growth most years. So, a few years back, council made the decision to charge business a higher tax rate, resulting in a total tax revenue split of 80/20 even though St. Albert’s current tax assessment split is 84.6 per cent residential and 15.4 per cent non-residential.

It's why the business community has long argued that the 80/20 tax split is deceiving. After all, it’s not the assessment split originally targeted. By moving from an assessment spit to a tax revenue split the city has effectively moved the goal posts and made businesses pay more per unit of assessment than residents do. It’s easy to see that the business community has a point.

And that brings us to the proposal before council to change the wording in the municipal development plan (MDP) from "tax revenue" to "tax assessment." It also speaks to the proposed 60/40 makeup of the city’s recently annexed Sturgeon County lands to the north in order to achieve the overall target of 70/30 for the city as a whole.

There’s no question the city needs more land zoned for non-residential if it ever hopes to reduce the tax burden on residents. What we must first determine, however, is what business and residents believe is a realistic non-residential/residential assessment target for our community. The city needs to move on from the virtual world of meetings and fully engage, in person, with all segments of our community.

Editorials are the consensus view of the St. Albert Gazette’s editorial board.