Taxes drop sharply on Penticton homes

Reduction in city property taxes expected to lower taxes by $119 for the average home

Penticton council members are all smiles this week after announcing Monday that property taxes in the city would be dropping this year.

“We are holding the line for the expenses of the City of Penticton, which is being passed along to the citizens,” said Mayor Dan Ashton.

This year the rate for the city’s portion of annual property taxes on residential property is going to be 3.98 per cent. Using a $325,000 home as an example, Doug Leahy, the city’s chief financial officer, explained that translates into significant savings for the average homeowner. According to his figures, in 2011 the taxes on a home that size averaged $1,584; with reductions across the board in residential taxes, school and other levies, that homeowner will pay about $1,463 this year.

“The property taxes on an average home in Penticton, this year, are going down an average of $119 in total, or 7.5 per cent, which is astounding,” he said, admitting that the reduction is due to a combination of factors, one of which was council’s work to hold the city’s financial plan to a zero increase for 2012.

“We’ve definitely held the line, and as the numbers prove, we have certainly reduced taxes.”

Leahy foundered, however, when trying to explain in detail how the assessed taxes could be dropping, even with a zero increase in the city’s spending.

“I would love to say that assessment and taxes are a very easy thing to describe,” he said, explaining that it is a complex formula, taking into account shifts between commercial, business, residential and other assessment categories.

While the taxes are based on the city’s 2012 financial plan, Leahy said they had to wait for the assessments to come in, as well as the requisitions from the various other government bodies like the Regional District of Okanagan Similkameen and the education system, before they could work out what taxes would be needed to meet Penticton’s tax requirement.

“You have the assessments and you have the total tax requirements. The key number is the tax requirement, that’s what this council said is staying at zero,” said Leahy, noting that the residential component of the annual assessments for Penticton dropped four or five per cent, while commercial went up and other categories also shifted slightly.

“You have to factor in the commercial, calculate the utility, the agriculture, everything,” said Leahy. “Once you roll up the whole assessment roll, then it is about how it is apportioned to come into our tax rate,”

While Leahy may not have been able to put the tax reduction into simple words, Coun. Garry Litke came prepared with props to help make his point that the city staff and council deserved a big pat on the back. Holding up a metre long strip of ribbon, Litke said it represented $1 of taxes, and began tearing off sections.

“First, you’ve got to pay the feds, you’ve got to pay for fighter jets,” said Litke. “Then we pay to the provincial government. What’s left is the municipal share. It’s eight cents on the dollar.”

Holding a small piece of his ribbon, Litke listed off what that eight cents is used for, including police and fire protection, streets, sewer and the range of other services provided by the city.

“And, we’re holding this eight cents to a zero increase. We’re holding the line on this little bitty piece of your tax dollar,” he said. “I think this is the time for us to brag a little bit.”

“We are holding the line for the expenses of the City of Penticton, which is being passed along to the citizens,” said Mayor Dan Ashton.

While many residents are still facing financial challenges, Ashton said some residents pay more for other services than they do to the city. “If a person has an average cable bill, a cable bill exceeds what they pay in property taxes.”