Rocketing Yukon property assessment values have given the city cause for pause.
In lieu of the soaring assessments, the city now plans to review its proposed 7.5 per cent tax hike.
When council and city administrators were crunching the numbers and coming up with this year’s budget, they didn’t anticipate such a steep rise in property assessments, said mayor Bev Buckway earlier this week.
“What we’re doing is, the staff is looking at it now that the assessment has come out,” said Buckway.
“We’ll certainly be having more discussion on that.
“That’s one of the things we want (the public) to know is we are re-examining things already so they can be assured we’re having another look.”
In her speech on December 10, Buckway unveiled a budget that included a 7.5 per cent tax hike for 2008 and four per cent for the following two years.
The budget also included $50 million in operations spending in 2008 and $98.7 million in construction projects between 2008 and 2011.
The city should do its homework before releasing budget figures, said Whitehorse Chamber of Commerce president Rick Karp.
City officials should have been well aware of what the assessments were doing before they tabled their budget on December 10, he said.
“They publish all of this stuff, and after the fact they come out with all of this new information — it makes you wonder how much homework they’ve actually done.”
The territorial government started sending out 2008 property assessment notices on December 14, said Kelly Eby, the director of YTG’s property assessment and taxation branch.
The government’s assessment cycle has officials from the taxation branch reviewing people’s property and improvement (building) values every two years, a consistent cycle that varies from past assessment schedules, he said.
“Some years there had been a five- to 10-year lag between reassessments.
“Everything (the base value of all properties) in the city went up 11 per cent.
“As part of that, when we break out the residential, it’s 16 per cent, but that’s the base.”
Base values calculate the total rise of all property values in the city as a group, as individual housing categories are difficult to calculate, said Eby.
“It varies depending on the use of the property and it also varies depending on if there are any additions, alterations, renovations and those kinds of things.”
Assessment values are different than market value and market prices. What a homebuyer is willing to pay is generally higher.
The biggest contributor to rising assessed values is land, said Eby.
“Land values varied by different geographic areas.
“The other municipalities didn’t see nearly the change in land values that Whitehorse did.”
In line with direction from council, city administrators continue to look at the city’s tax rates, said city manager Dennis Shewfelt.
The original tax increase of 7.5 per cent was based on a forecast of a seven to eight per cent rise in property assessments, he said.
“Our assessment assumptions, we didn’t have the assessment data when we made those projections, so now those assessments were higher than we anticipated.
“Now we’re having a look to see whether we have to adjust things or not.”
The tax increase will be applied to the 2007 mill rate — taxation rate — of 1.237, he said.
“For 2007 it was 1.237 times your assessment value and those were your property taxes.
“We’re looking at how much more we need relative to last year.”
Because most people’s property values are different, their tax bills will also be different, added Shewfelt.
But, regardless of the tax bill, everybody is paying for the same services, he said.
“One of the things that people have suggested over the years is that country residential should have a different mill rate than urban residential and that’s based on the types of services they get.
“What they don’t understand is that the water, sewer and garbage services you get in the urban centre aren’t part of your property taxes anyway.
“So you’re really only paying for the same types of things through your assessments, that’s your road maintenance, snow clearing, the recreational elements and those types of things.
“Everybody is assessed the same for the same suite of services.”
Any changes to the budget’s tax rates will be made during the budget-bylaw’s second reading after the public hearing on January 14, said Shewfelt.