Most Central towns face budget woes
Many Central Newfoundland towns are facing a budgeting dilemma this year – the overall assessed values of properties within their boundaries took a drop.
Gander is one.
“There were significant drops here, particularly on commercial properties,” noted Wilson Hoffe, chairman of Gander council’s corporate services committee.
“…Property values have a tendency to fluctuate and the unfortunate part of it from a municipal perspective is that the fluctuation can tend to skew, at times, what a municipality does,” he continued.
“Speaking for Gander … we’ve always taken the position of being accountable to our taxpayers in a proper manner. If the assessed values, for example, increased say 20 or 30 per cent, we would decrease the mil rate to reflect that increase in tax rate to give us the same tax yield as we would have the year before…”
Towns of various sizes, including Lewisporte, Bishop’s Falls, Springdale and Grand Falls-Windsor, for example, experienced drops.
For Botwood, which was still finalizing a budget in the third week of January, this most recent dip in assessed values is the continuation of a trend.
Town manager Steve Jarrett explained that while the town’s budget had been approved in principal before the end of 2021, council was still wrestling with the final tax schedule, due in large part to dropping assessed property values.
“We’ve been hit very, very hard with assessments,” he said, noting the overall residential property value in Botwood for 2019 was $117,000. For the 2022 taxation year, the average has fallen to $107,000.
NEW METHOD
In 2021, for the first time, towns received truly up-todate detail on assessed property values.
The provincial government had responded to requests from municipalities for more current and up-to-date property assessment details by changing the Municipal Assessment Act to now require an annual assessment report for each town. Previously, the Municipal Assessment
Agency would provide new information to towns on a three-year basis.
Don Hearn, executive director and chief executive officer of the Municipal Assessment Agency, explained this year’s figures were current on Jan. 1.
“We analyze all the sales that take place within a particular municipality,” he explained. “We publish values based on the analysis we complete. We analyze it down to neighborhoods and what properties are actually selling for. For example, you may have a certain class of properties that are selling for less in Windsor than they are in Grand Falls. You may have a certain class of property that is selling for more or less in one region of Grand Falls than another.”
Hearn added, “… at the end of the day, the town does not do their budget based on individual values. They determine their tax rate on the overall dollar amount that they can tax against.”
A dip in overall assessed values is an anomaly for this province, he noted. The province had seen a continuous growth in property values for close to 20 years.
“There was a little market crash (around 2018) and we actually (saw) a reduction of valuations in with most municipalities, if not all, within the province.”
“Tax assessments are supposed to be done so that the tax burden is shared equally amongst the citizens,” he explained. “An increase or decrease in assessments doesn’t necessarily mean an increase or decrease in your taxes. Ultimately, it’s the town that sets the mill rate. We provide this information to the municipality so they have an understanding going into their budget process of what their tax base is,” he said.