City plans tax hike for some non profits

Whitehorse City Council is again considering changes to how much of a break non-profit organizations and similar groups get on their property taxes. City officials insist the move is all about transparency and equality.

Whitehorse City Council is again considering changes to how much of a break non-profit organizations and similar groups get on their property taxes.

City officials insist the move is all about transparency and equality.

But non-profits say that even a small increase to the taxes they pay is far too significant to their tight budgets.

A formula for calculating how much tax abatement an organization can receive is scheduled for a vote on Monday.

Trying to understand the amount of tax relief an organization gets from the city is a confusing prospect. That’s part of the problem, according to the city.

Some organizations have all of their property taxes covered thanks to individual resolutions passed decades ago. Others have the promise of tax help written into their leases, and still others have to apply to the city every year asking for a grant to cover some or all of their property tax.

City manager Christine Smith said this “ad hoc” way of managing things needs to be updated.

“We’re moving the government into a modern era. Governments now are meant to be transparent, fair, open and accountable,” she said.

The proposed new formula would apply to every organization that wants some amount of its property taxes waived.

It uses a group’s revenue combined with its “current assets” to determine what level of tax break they qualify for. That could range from 100 per cent coverage to 50 per cent.

“Current assets” is a term used in the accounting world to describe assets that are expected to be used within the year. It means things like cash, GICs, accounts receivable and inventory. It does not include fixed assets like land and buildings.

The changes wouldn’t take affect until January, so it’s difficult to say exactly what the dollar amount would look like for individual groups.

But some of them are worried.

Early estimates suggest the MacBride Museum will have to pay about $5,000 a year.

For decades the entire property tax cost for the downtown museum – about $27,000 – has been waived.

Board chair Keith Halliday said a $5,000 increase doesn’t look like a lot on paper, but it is a lot for an organization the size of MacBride.

“That’s a significant amount for an organization with core funding of about $110,000,” he said.

MacBride uses that core to grow its annual budget to about $500,000. It does that by paying staff to run events and do front-of house sales and by applying for grants that require them to match the cash.

“Our biggest expense is staffing and any tax impacts will force us to reduce staff hours, which will force cuts to operations that are yet to be determined,” according to a letter to the city from the board.

The letter suggests the museum is being penalized because it has a fiscal year that ends in December, not March.

“We have cash on hand on Dec. 31 to tide us over until the end of the territorial fiscal year on March 31st. This inflates our current assets and triggers more tax,” the letter reads.

Halliday questioned whether it is a good idea for the city to reduce this “quite modest expense” when groups are doing such good work.

That’s a sentiment shared by Challenge executive director Rick Goodfellow.

The organization, which helps Yukoners with disabilities, gets part of its property taxes covered by the city.

Under the new formula, it’s estimated Challenge would owe about $2,500 more annually.

“Really honest and for true, it’s one of those things where you go, how much is that $2,500, how much difference is that going to make in the city’s budget, is that really going to make such a big deal?” he said.

But it would be a big deal to the organization, he said.

Goodfellow said Challenge usually runs a deficit and counts on income from its Career Industries woodshop to make up the difference.

In all it costs about $740,000 a year to run the organization.

But the portion used for the building is much smaller and costs like heat and electricity rise every year, he said.

“When we’re talking about a $75,000 O and M budget for our building, $2,500 doesn’t sound like much. But when we’re running a deficit already it just adds to it. It’s a big deal to us.”

In all, about 30 groups a year apply for this type of help from the city, director of corporate services Robert Fendrick said. The pot is usually set at $140,000.

Last year it received a one-time bump of $20,000 and the decision on this new formula was deferred until consultations with service groups were done.

Many of those organizations will not see a difference in the money they get.

Of the organizations that were looked at, Fendrick estimates the total difference is only about $23,000.

Having reserve cash in the bank is important for any well-run city, Smith said.

“Because they basically have to look at all the infrastructure that you see around you when you look around Whitehorse. Think about what’s underground as well. We have to be able to replace that, anytime.”

She said the city is prepared to make this a phased-in approach, if it is approved, meaning the reductions could happen over a few years.

“We don’t want it to hurt anybody. We just want everybody to know how to deal with the City of Whitehorse when they get their grant.”

The City of Whitehorse allocates just over $1 million annually in multiple grant pools.

The city is planning on reviewing all grant-related policies eventually.

Contact Ashley Joannou at

ashleyj@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

d
Wyatt’s World

Wyatt’s World for March 5, 2021.

g
Yukonomist: School competition ramps up in the Yukon

It’s common to see an upstart automaker trying to grab share from… Continue reading

The Yukon government responded to a petition calling the SCAN Act “draconian” on Feb. 19. (Yukon News file)
Yukon government accuses SCAN petitioner of mischaracterizing her eviction

A response to the Jan. 7 petition was filed to court on Feb. 19

City councillor Samson Hartland in Whitehorse on Dec. 3, 2018. Hartland has announced his plans to run for mayor in the Oct. 21 municipal election. (Crystal Schick/Yukon News file)
Councillor sets sights on mayor’s chair

Hartland declares election plans

Whitehorse RCMP will provide internet safety training due to an uptick of child luring offences. (iStock photo)
RCMP hosting internet safety webinars for parents and caregivers

The webinars will take place on March 23 and 25

Chief Medical Officer of Health Dr. Brendan Hanley receives his first dose of the COVID-19 vaccine from Public Health Nurse Angie Bartelen at the Yukon Convention Centre Clinic in Whitehorse on March 3. (Crystal Schick/Yukon News)
State of emergency extended for another 90 days

“Now we’re in a situation where we see the finish line.”

The Yukon government says it is working towards finding a solution for Dawson area miners who may be impacted by City of Dawson plans and regulations. (Joel Krahn/Yukon News file)
Miner expresses frustration over town plan

Designation of claims changed to future planning

Team Yukon athletes wave flags at the 2012 Arctic Winter Games opening ceremony in Whitehorse. The 2022 event in Wood Buffalo, Alta., has been postponed indefinitely. (Justin Kennedy/Yukon News file)
2022 Arctic Winter Games postponed indefinitely

Wood Buffalo, Alta., Host Society committed to rescheduling at a later date

Crews work to clear the South Klondike Highway after an avalanche earlier this week. (Submitted)
South Klondike Highway remains closed due to avalanches

Yukon Avalanche Association recommending backcountry recreators remain vigilant

RCMP Online Crime Reporting website in Whitehorse on March 5. (Haley Ritchie/Yukon News)
Whitehorse RCMP launch online crime reporting

Both a website and Whitehorse RCMP app are now available

A man walks passed the polling place sign at city hall in Whitehorse on Oct. 18, 2018. The City of Whitehorse is preparing for a pandemic-era election this October with a number of measures proposed to address COVID-19 restrictions. (Crystal Schick/Yukon News file)
City gets set for Oct. 21 municipal election

Elections procedures bylaw comes forward

A rendering of the Normandy Manor seniors housing facility. (Photo courtesy KBC Developments)
Work on seniors housing project moves forward

Funding announced for Normandy Manor

Tom Ullyett, pictured, is the first Yukoner to receive the Louis St-Laurent Award of Excellence from the Canadian Bar Association for his work as a community builder and mentor in the territory. (Gabrielle Plonka/Yukon News)
Tom Ullyett wins lifetime achievement award from the Canadian Bar Association

Ullyett has worked in the Yukon’s justice ecosystem for 36 years as a public sector lawyer and mentor

Most Read