Okotoks town council is debating a non-residential tax increase which would impact local businesses, but council must tread carefully to ensure its decision does not stunt economic growth in the community.
In the Town’s proposed 2012 budget council is considering raising the tax rate on non-residential properties. Currently, non-residential and business properties in Okotoks are taxed at a rate 20 per cent higher than residential. The proposal is to increase the differential to 30 per cent. The 2012 budget also included a proposed residential tax increase of 5.5 per cent for the typical single family home.
At first glance this seems like a punitive increase for local business owners. However, compared with municipalities in the area the increase still keeps Okotoks’ non-residential differential well below similar communities. For example, Airdrie’s non-residential tax rate is 85 per cent higher than its residential rate and Cochrane’s is 42 per cent.
Rarely is one eager to support a tax increase of any sort, but this is a move by the Town to bring taxes on non-residential properties more in line with municipalities throughout the Calgary region.
In the past, the philosophy of Okotoks town council was to keep the non-residential tax low in an effort to entice small business to the community.
According to Okotoks Coun. Laurie Hodson this experiment has not paid dividends. As a result, Okotoks council is now playing catch-up with its non-residential tax rate.
Thankfully, Okotoks council has elected to play catch-up in small increments rather than large hikes.
It’s still prudent to keep Okotoks’ non-residential tax rate low as it will be attractive for businesses looking to relocate or set-up shop in the community. As well, keeping the differential at a manageable rate is welcome news for the existing businesses, many of which are still struggling in tough economic times.
Few business owners would question they are expected to pay their fair share when it comes to municipal taxes. However, many local businesses pay much more than their share as they support local sports teams, arts programs and community initiatives — above and beyond what they contribute to the municipal coffer.
Council is expected to make a final decision on the municipal tax rate on Dec. 12 and whatever their decision they need to ensure their choice takes into account the welfare of Okotoks’ business community.
