Province's educational funding assessment impacts Okotoks combined taxes

April 4, 2017

The provincial government’s educational funding assessment for 2017 will require Okotoks residents to pay 10 percent more in educational taxes. Okotoks’ share of the funding will increase from $12.5 million to $13.7 million. The typical property owner in Okotoks will experience an increase of $113, from $1153 in 2016 to $1266 in 2017.

“Funding is based on an equalized assessment formula,” said Finance and Systems Director Rolland Russell. “The recent provincial decline in non-residential property values due to the economic downturn means that municipalities are experiencing an increase in the share of funding they need to provide to the province.”

In Alberta, education is centrally funded on a provincial basis where the province establishes the amount each municipality is required to contribute. Each municipality then establishes their education tax rates by dividing this required amount by their current taxable assessment.

This year’s increase has resulted in a dramatic impact on municipalities’ taxes from costs recovered for the provincial government to pay for education. The following graph demonstrates a significant fall in equalized assessments in Calgary and Edmonton in 2017 which lead to a redistribution in equalized assessment throughout the province.

The Town of Okotoks is a member of the Alberta Urban Municipalities Association (AUMA) which passed a resolution in 2014 calling upon the province to remove municipalities from the responsibility of collecting these taxes on behalf of the provincial government. The resolution indicated that the province’s current system of collecting education property tax blurs the lines of accountability and transparency. This leads to the public’s misconception regarding municipal government taxation policy and responsibility.

“Because we have to collect education taxes at the same time as property taxes, the public assumes that all the funds are going to the municipality,” said Russell.

Since the resolution was presented to the provincial government, it has indicated no intent to change the current system of collection.