Bad Formula

Business owners furious over taxes

Thursday, 14 March 2013 00:00 Collin Gallant

Chris Hellman, right, speaks to Ald. Ted Clugston during a meeting held Wednesday by business owners from the community to discuss the city's tax assessments.--NEWS PHOTO EMMA BENNETT

50 meet to discuss a plan of action
COLLIN GALLANT
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About 50 angry business owners are planning co-ordinated action after most say their new property assessments show "unreasonable" and "ludicrous" increases.
A meeting in a South Flats warehouse on Wednesday afternoon heard about increases in the 200 to 400 per cent range, while City of Medicine Hat officials say its finance department is already looking at tax bills that show the largest increases under a new system of calculating the value of buildings and property.
"We're forming an ad hoc group to further our message of displeasure with City Hall," said Nutters president Donald Cranston, who hosted the meeting.
"We have a wide range of property owners who have widely varying property assessments that don't seem to make a lot of sense."
According to officials in the Corporate Services division of the city, the assessors office moved this year to fully implement the Mass Appraisal process as recommended by the province through the Municipal Act.
In the system, similar properties are lumped together and compared against each other to determine a value.
The group admits that some properties have declined in value as result but others are saddled with huge increases, which they fear will translate to massive tax increases that can't be budgeted for in a single year.
Harry Mitzner, owner of Medicine Hat Wholesale Foods, said his assessment quadrupled and he can't understand how such large increases were approved without red flags immediately going up.
"For that type of money, I'd leave all my groceries, my trucks and hand the keys over to the city," said Mitzner. "It's ludicrous no matter what system you use to calculate it."
David Ziegenhagel, who owns Parker Countrywide Furniture, revealed his statement showing that his downtown business jumped more than $2 million in value according to the assessment.
"That could be a $70,000 tax increase," said Ziegenhagel. "If this stands there will be drastic changes in the business community in Medicine Hat. Drastic."
The Medicine Hat Chamber of Commerce discussed the issue with city finance officials on Feb. 28 - the day the assessments came out - and have more meetings planned for next week.
Both the city and the Chamber are encouraging business owners with concerns to file appeals immediately as the window for reassessments closes after 60 days.
Chamber chair Jason Melhoff told the News on Tuesday that it also wants the city to reveal the formula used and expects more answers at next week's meeting.
Property assessments are used to calculate a final tax bill by factoring it against the mill rate, which will be determined by city council next month.
Those who attended Wednesday's meetings speculated that the city is in need of cash and is "targeting" business owners.
That's simply not the case, said Ald. Ted Clugston, a member of the Corporate Services Committee, who attended the meeting Wednesday.
"Assessment is a completely apolitical process... it's mandated by the province and I know that sounds like a cop-out," said Clugston.
"The city isn't short of money or collect anymore money because of this. This is not a tax increase or a tax grab.
The mill rate is applied by the city against the total assessment to reach a specified revenue called for in the budget - essentially, if the assessment rises, the mill rate is consequently lowered to meet the number.
Overall, an increased assessment is actually revenue neutral for the city, said Clugston, though individual tax bills rise and fall.
"I can sense the frustration and I'd be frustrated as well," said Clugston. "You can't budget for this over a short period of time."
Clugston said getting the assessments checked and properties reassessed is the city's first priority but eventually, some staggering of increases to the municipal tax portion of property tax may be required.