At first glance, it seems a little unusual. For every assessed dollar, commercial properties in Jasper pay 6.5 times the amount in municipal tax than do the residential properties in town. This split rate has a substantial impact when it comes to breaking down the percentage share of the overall municipal tax requisition. In 2006, in-town commercial properties shoulder 64 per cent of the tax load, while only 18 per cent falls on the “urban residential” ratepayers.

Some in the business community believe the ratio needs to be discussed. Several dozen members of the business community descended on council last month to show their support for a plea to either reduce or maintain municipal taxes. The business owners cited an extended downturn in the tourist trade as justification for their request. Those in the room who spoke against the 6.5 to 1 split rate claimed that Jasper’s ratio was the most extreme in the province. While it remains one of the largest splits, the Municipal District of Opportunity (a large, mostly rural area northeast of Edmonton) recently passed a bylaw that enshrined a 9:1 split between commercial and residential taxpayers. Still, most communities in the province keep their rates closer together, if not equal.

Any future reduction in the split would in fact be the second since Jasper’s incorporation as a municipality. From 2001 until 2004, the ratio stood at 7.5:1.

“At the time of the vote for incorporation, we had extensive fiscal modelling to determine the cost of maintaining the municipality,” said Municipal Manager George Krefting. “Rightly or wrongly, the attempt was made to have the tax split reflect what the previous ratio of payments was. We looked at various scenarios, 7 to 1, 8 to 1, 6 to 1, 5 to 1 and eventually, 7.5 to 1 seemed to be the split that would keep the burden close.”

A key reason for establishing a substantial split in the tax rate was due to a major increase in the education tax burden for residential ratepayers, Krefting recalled.

“When the province took over the administration of education taxes, this community got hit really hard,” he said. “Residential properties had seen a big bump in particular.”

With education tax assessments based on property value, Jasper was paying a higher than average share of the overall provincial tax. Although the education taxes are collected by the muncipality and then remitted to the province, Krefting and company have no power to determine the rate breakdown between residential and commercial taxpayers. As a result, the first real relief was felt in 2004, when the Alberta government agreed to extend Jasper special considerations that had been offered to the town of Banff. The provincial tax rate fell slightly more than two per cent that year, but Jasper’s dropped by more than 14 per cent. The decrease in the requisition provided the local administrators with a choice — maintain municipal tax rates and use the “new” money to fund services, or reduce the tax burden. The decision was made to reduce the municipal split to 6.5 to 1.

Despite years of campaigning for further decreases or adjustments to the provincial education tax regime, there is little indication that a significant shift is in the offing. One noteable change has been in the means of assessing properties — the province is moving towards an approach based on the income a property generates, rather than its value. This shift has led the Town of Banff to alter its own split.

Since Banff’s incorporation in 1990, commercial properties paid five times the tax for every assessed dollar when compared to residential rates. That split is now down to 4.823 to 1, said Kelly Gibson, the senior accountant for the Town of Banff. 

“The change of assessment method would have been a bigger burden on commercial properties,” he said. 

According to Gibson, there was little concern expressed by Banff’s business community over the split rates until the changes in assessment method were announced. Would Jasper be able to further reduce its split? 

Krefting said that doing so would require a hard choice.

“If you lowered it, the options would be to reduce the budget, or raise residential taxes,” he said. A smaller budget means fewer services, and that’s something that Jasperites have been vocal about avoiding in the past, Krefting said. On the other hand, increasing taxes for residential properties would hardly be a popular development, especially since it could prevent young families from staying in Jasper given the already significant cost of living.

“It’s difficult for me to say,” Krefting said when asked if he thought there was capacity within the community to absorb a residential property tax increase. “There have been modest increases across the board, but I think it would depend on personal situations.”

Any downward shift would lead to marginal savings for the business community. The 2004 alteration in the split reduced the urban commercial burden by just two per cent while increasing the residential share of the total requisition by three per cent. Still, discussion about tax rates is always on the table at budget time, Krefting said.

“There wasn’t a great deal of discussion about it this year, but there has been in the past,” he said. “It will probably be discussed more now that it is in the public eye.”