Perhaps it’s only appropriate that hints of rising property taxes are the first hint that Saskatchewan Party government may be sailing towards troubled waters.
The lowering of property taxes was really the first sign of good fortune for both Premier Brad Wall’s government.
Of course, we should emphasize that Government Relations Minister Jim Reiter was only speculating that the education proportion of property taxes is going up. That said, it would sure seem to be pretty solid speculation.
“There may be an increase and I don’t know to what level yet, but we’re going to mitigate it as much as we possibly can,” Reiter told reporters at the legislature.
To listen to Reiter talk, one might think that any such tax increase is simply a consequence of Saskatchewan’s prosperity. Well, the kindest thing one can say is that it’s a little more complicated then that. If property taxes go up, it will really be because of the choices the Sask. Party government has made.
You see, 2013 is a property reassessment year in Saskatchewan — really, the first since the government eliminated the taxation authority local school boards in 2009. It was a move that was heralded as a good thing by most everyone for a couple obvious reasons:
First, nobody particularly liked paying taxes and having one less local government with the authority to impose taxation was a rather pleasing notion.
Second, it was accompanied by fulfillment of the Sask. Party government’s 2007 policy to reduce education property taxes by more than 80 per cent on farmland and nearly 30 per cent on residential properties.
Many of you in rural Saskatchewan in particularly will recall former premier Lorne Calvert repeatedly telling the Saskatchewan Association of Rural Municipalities that the status quo was not on. Then, NDP governments would ignore tax relief come budget time.
Well, Wall’s government not only came through on the Sask. Party promise, but also ensured that local school boards would simply not negate tax relief by applying their own local taxes.
But then along comes Reiter’s news that assessed home property value in Saskatchewan has increased 67 per cent in the past four years and the new mill rate may — at least when it comes to the education portion of property tax bills — may need somewhat of an adjustment.
“The province is going to do what we can to get as close to revenue neutral as we can,” Reiter said. “I can’t tell you that we’re going to eliminate that increase.”
The thing is, though, property tax reassessments in the past were revenue neutral. Sure, some people’s taxes would go up, but others would go down, reflecting a saw off for local governments that are legally required to balanced their budgets.
Now, Reiter is offering no such assurances that this year’s reassessment will be revenue-neutral. In fact, he’s pretty much saying it won’t be.
The problem with what the minister had to say is blaming the need for tax increases on increased property value. That is a bit of a red herring.
Whether your house or your farmland is of more or less valuable has nothing to do with the services you require. Both the costs of schools and municipalities may be rising during this time of economic growth, but that has nothing to do with the value of your property.
What does seem obvious, however, is that the Sask. Party is seizing on this assessment opportunity to make up for lost tax revenue.
Perhaps more revenue is necessary to deal with the province’s growth. But the government should at least say that.
Economic prosperity for both you and the province? Perhaps, but that’s not really what this reassessment tax hike is about.
This very much looks like a Sask. Party government scrambling to balance its next budget.
Murray Mandryk has been covering provincial politics for over 22 years.