The education requisition took the brunt of budget discussions at the May 13 council meeting, as council expressed frustration for being responsible for collecting provincial taxes.
Ralph Ettenauer, director of finance and systems for the Town of Okotoks, presented the 2019 budget amendments for requisition, wherein the 2019 budget requires amending in order to reflect the estimated requisitions.
The Minister of Municipal Affairs recently confirmed that the provincial education requisition would be set later this fiscal year, with the recommendation that municipalities use the same education requisition rates collected for 2018.
The amendments included the actual requisition rates for the Okotoks Public Library, Westwinds Communities, and general tax revenue, leaving only the education requisition in question.
“As you’re aware, the Province has gone through an election and has basically indicated that at this point in time they will not be providing any direct numbers for us for the Alberta education requisitions until the fall and that it’s best for us to come up with our best calculations?” said Ettenauer. “Then we’ll true it up in 2020, so we’ve done our best to estimate what we think we’ll be paying.”
The original budget estimated the education requisition at $13.719 million. With the new estimation, the portion paid by residents of Okotoks increased by $613,000 (4.5 per cent) to the revised amount of $14.332 million.
Having made its best estimate and spot-checking with comparable municipalities, Ettenauer said they are about as close as they can get.
The question mark sitting over the education requisition left council uncomfortable with the potential impact on residents.
“I don’t recall this ever being the case, where we haven’t been able to actually put the Alberta Education requisition on, so we’re estimating 4.5 per cent, what happens if the Province comes back and says it’s 3.5 per cent and we’ve overcharged by 1 per cent?” asked Mayor Bill Robertson.
Ettenauer responded that the Province is recommending the municipalities “prepare to do a true-up in 2020,” and balance any excess or deficits in the next fiscal year.
Robertson called it an awkward situation, expressing concern that, in the case of trueing-up the next year, if a resident was to sell his or her home and leave the community they would not receive the tax break in the case of being overcharged.
According to Robertson, there are around 300 homes on the market, and he predicted there would be questions on corrections for overpayments and underpayments should houses be sold.
Ettenauer did not believe there was any course of action the Town could take to reimburse individuals.
“So the Province failed to do their work, because they were in an election and that means the government stops, unlike municipal level of government, and haven’t done a budget,” said Coun. Tanya Thorn.
“So we’re going to shore up if it’s in excess, (but) what happens if we’re at 6.5 per cent? Does that mean next year we’re going to have that extra 2 per cent charge plus next year’s 6.5 per cent?”
Thorn said this situation was an example of a flawed system, where municipalities do work on the province’s behalf and said, for better hypothetical functioning, to “leave (municipalities) out of it.”
“Again, this is a perfect example of why municipalities shouldn’t be collecting the Province’s tax,” she said. “This is their tax, it goes on a tax bill that says our name on it, and they haven’t done their work. We’ve got all of our organizations doing their work, doing the work they need to for this requisition, and it’s up to us to explain (the discrepancies to the taxpayers).”
