Trent Ernst, Editor
The budget was passed on May 9, slipping in comfortably under the official deadline of May 15 for Municipal budgets to be finalized.
This means that starting very soon, residents and businesses in Tumbler Ridge are going to start receiving their tax bills in the mail.
For many, this is the part of living in a democracy that they don’t like. Sure, the fact that we have roads and running water is great, and not having to poop in a hole in the backyard is nice, but do we need to pay so much?
It wouldn’t be so bad if every level of government didn’t take their pound of flesh. Having just finished income tax season, it’s now time for local governments to get their share.
Unlike income tax, which is based on the amount of money you bring in annually, municipal taxes are determined by the value of the property you own within the municipality. That value is not determined by what you might ask if selling the house, but on the assessed value, which is done by BC Assessment.
If you lived in Tumbler Ridge for the last decade, perhaps you remember the time around 2004 or 2005 when in one year, the assessed value of your house doubled, from around $40,000 to $80,000 and the next year, the assessed value doubled again.
If you look at your property as an investment, that’s a good thing.
But then you get your tax bill. And your taxes certainly went up dramatically, though not double. Why? Well, partially because the value of your property went up, but also because the cost of everything has gone up, and the District has built an increase into its tax regime to keep pace with that.
But why didn’t it double? It could have, if the mill rates had stayed the same, but typically, the municipality looks at the total amount needed to cover expenses, and bases taxes on that, rather than keeping the tax rates the same. Which is probably a good thing.
What is the mill rate? It looks complicated when you see that the mill rate is 4.7928. That number doesn’t seem to have any basis in reality, but it is simply an expression of how much you are paying per thousand dollars of assessed value.
Let’s keep it really simple. If your house is worth $1000, you’ll be paying $4.79 in taxes. If you have a house that’s valued at $100,000, you are going to be paying $479.28 in taxes.
If the value of all properties in Tumbler Ridge increased, on average, 100 percent, the District is going to look at the total amount it needs to collect (based on last year’s budget, plus about three percent for inflation), and recalculate it’s mill rate.
Now, if you completely re-did your house, and doubled its value, while the average assessment for the rest of the houses in Tumbler stayed the same, you’re out of luck. They don’t change the mill rates on a per-property basis.
So, when you get your assessment from BC Assessment, you are able to calculate how much you’ll be paying in taxes. Your house is valued at $179,600? Multiply that by 4.7928, and you’ll be paying $860,768.88 in taxes to the town this year.
Wait. Oh, right. Because Mill rate is per thousand, you need to divide that by 1000. Your tax bill becomes $860.79.
Which isn’t too bad, I suppose.
Except that when you get your tax bill, that number is going to be higher. Like, double.
What the…? Did they get my taxes wrong? Does Trent’s math skills suck? (He is a writer, after all.)
Alas, no. Because, while we’ve paid Income tax to the Federal government and Provincial government, and we’ve paid property taxes to Tumbler Ridge, there are a couple things we’re forgetting about.
First things first. There’s a reason why we say we live in the Peace Region. Because there is another level of government for this area, called the Peace River Regional District, and they, too, deserve their cut of the tax pie, which the District of Tumbler Ridge kindly collects for them so you only get one property tax bill, as opposed to two (or three, as we’ll see below).
Their cut of the Tumbler Ridge pie is larger this year—up nearly 30 percent over last year—but it is still a relatively small slice, in the scheme of things. (One of those “I’m on a diet, but that looks good, could I just get a sliver…well, maybe a little more…perfect” slices.) The mill rate for land and improvements? 0.1179. On our theoretical $100,000 property, it adds another $11.79.
Finally, let’s talk about your health. The District of Tumbler Ridge also collects a portion of taxes for the Regional Hospital. Mill rate? 0.5932, or $59.32 for our $100,000 home.
There’s more: School, police, Municipal Finance Authority. These all add up, too. (Add up to what? The rates are being finalized even as we speak). And don’t forget Water ($220.13) and Sewer ($127.63), which are charged separately.
Which sounds like a lot, but in 2010, Tumbler Ridgians paid the 27th lowest municipal tax in the province, out of 162 municipalities, lower than Chetwynd, Dawson Creek, Fort St. John and Hudson Hope. Only Mackenzie and Pouce Coupe paid less tax in the Northwest than us, and in both cases, the average assessment was lower than here. They say there are only two inevitabilities in life, and when you consider the alternative, maybe paying taxes isn’t so bad.