Municipal managers all over Alberta have something to smile about in the wake of the provincial budget, but they don’t have cause for complete celebration.

As part of the feel-good package of spending and tax cuts that was announced last Wednesday (March 22), the province has agreed to reduce the rate of education property tax in the province by seven per cent. This means that muncipalities can use more of the money they will collect from ratepayers on civic spending, rather than having to remit it to the provincial coffers. 

While the reduction is a positive step, the Municipality of Jasper believes more could have been done. Council sent a letter last week to West Yellowhead MLA Ivan Strang supporting a province-wide campaign to return the education tax requisition to 2001 levels. Advocated by the Alberta Urban Municipalities Association (AUMA) this measure, if adopted, would set the provincial requistion at $1.2 billion. For the 2006-07 fiscal year, that amount totals $1.475 billion.

According to Jasper’s Municipal Manager, the province has decided to come part way to the AUMA’s position this year.

The assessment value of properties in Alberta increased 10 per cent last year, but the overall requisition amount is only growing by three per cent, meaning that although more money ends up in the province’s hands in an absolute sense, the rate of taxation has actually fallen by seven per cent.

“If the assessment rate goes up and you keep the tax rate the same, then the requisition will increase according to the rate of assessment growth,”  George Krefting explained.

“The fact that the education dollars did not keep pace with the assessment dollars is good news, but the fact that the rates weren’t reduced to where the AUMA wanted them to go is disappointing,” he said.

While the province does have a number of grant programs that municipalities can apply to in order to fund infrastructure projects, Krefting thinks that allowing municipal governments to have a larger piece of the taxation pie is a more effective solution.

“I believe it is better because as soon as you get into a grant program, it’s conditional and it does restrict the municipality somewhat,” he said. “It doesn’t provide the opportunity to meet the unique needs of each community.”

Krefting and those who share his view have an ally in the legislature. Local MLA Ivan Strang has been campaigning for several years to reduce provincial education taxes.

“I would like to see us be able to pay for it because it’s a provincial responsibility and then it would be up to the municipalities to tax for the services they require and if they don’t do a good job of it then they’re turfed,” said Strang. “I’ve been advocating this for quite a while.”

This year’s seven per cent reduction is part of a longer term plan being developed out of the Municipal Affairs ministry, Strang said.

“They’ve got a committee struck including representatives from AUMA that’s looking at roles and responsibilites,” he said. “They’ve been working on this for a few years now.”

Strang has heard extensive feedback from constituents on the budget.

“They’re concerned on a number of aspects; some say there’s not enough money for education, some others have their own niches that they want filled. Everything’s a priority,” he said. “We don’t have much wiggle room. Between health, education and infrastructure, that’s 74 per cent of the spending.”

As for the education tax element, the specific impact of the decision for Jasper will be understood as soon as Krefting receives the municipality’s requisiton request.