In the last two weeks many business owners in Carlyle have been struck with a financial blow they consider to be a potential deterrent in effectively maintaining their business in the town.
Business owners along Main Street and across the town of Carlyle recently received their property tax for 2013 and some are complaining of the huge increases added to their payments. Increases range from 35 and 62 per cent to exorbitant numbers of over a 100 per cent according to some store owners. However officials explain that the tax increase, which is based on market value can pose some difficulty based on the economy. Steve Shultz owner and operator of Pharmasave in Carlayle said he is deeply concerned about how the town will grow and prosper when property tax is so excessive. He said he understands that taxes are a fact of life but explained that such increases are overwhelming.
"We're in a state of shock to see a - personally a 51 per cent increase in my property taxes , I don't understand it, I realize that reassessments were done on all the values of all the buildings but regardless of that, with the mill rate they apply it literally - for some businesses it's devastating," he said.
"I know one other business in town that saw theirs jump 101 per cent. You look to the future and wonder why would anybody want to come and set up a business in Carlyle and you can go to Arcola or Manor"
Other members of the business community shared their gripe with the new changes in their property tax with the Observer. Ted Foster of Foster's Audio and Video has been in operation in Carlyle for over 21 years and saw his taxes increase to about 37 per cent. He believes that the town will suffer from the increased taxes.
"There will be no more new business to build anything in Carlyle and the business tax in this community is higher than anywhere Redvers, Carnduff and Oxbow or any other town our size. I'm not too sure why they would want to kill off business development in this town." he said.
"Obviously they've been spending money they didn't have but if anybody had a warning a year or two ago that taxes could possibly double they would not have built this communityTo have an increase of 35, 50, 60 or a 100 per cent is absolutely insanity"
Foster said that the value of property in Carlyle has risen but identified that the problem isn't with the value of the property but rather with the mill rate which town council sets. Mill rate is the amount of tax per thousand currency units of property value set by towns, municipalities or cities. This rate is calculated using different variables based on a towns needs and goals.
The town administrator of Carlyle Hugette Lutz spoke with the Observer and said assessments in Carlyle did go up over the provincial average but added that the mill rate dropped to 11.85 from last year's rate of 18.5. Lutz explained that people's taxes that went up by a 100 per cent are a result of them not being taxed last year because they were new businesses. This she said could explain some people's concerns but added that assessment notices were sent out to every property owner and they had 60 days to appeal their assessments; Lutz expressed her concern with the issue.
"I don't want to discount these people if they legitimate concerns," she said.
It is set in legislation that once every four years every property assessment is to be updated to reflect a more current valuation. The 2013 update reflects the average value of property in each jurisdiction as of Jan 1 2011. Between 2006 and 2011 Saskatchewan experienced one of the strongest economical growths in Canada and according to Stats Canada, whenmeasured by real gross domestic product the economy grew by 2.2 per cent in 2012. However, according to Irwin Blank, CEO of the Saskatchewan Management Assessment Agency (SAMA) this growth translated to substantiating increased property values across the province. However, he explained that in different parts of the province the economy was stronger or slightly weaker than the average and said there were increases across the province but they weren't uniform.
"Our job on the assessment side is to establish assessments that have a one to one relationship with the average value of that type of property in that location. So similar properties should be assessed similarly and they should also be assessed on average at the level what those properties were selling for as of Jan 1 2011," he said.
"Carlyle was one of the communities, and there's quite a few of them in the southeast in the oil area, where there was very strong demand(market)which caused the value of properties to increase more than the provincial average between 2006 and 2011."
He also highlighted that school tax is based on a uniformed rate and that the same tax rate for school tax is applied to all properties including commercial ones. And that the government makes sure that on an overall provincial basis new tax rates are revenue neutral. However communities with properties that increased less than the provincial average will see a tax decrease and the ones increase more than the average see a tax increase. Blank said setting tax rates can be a challenge for town councils' because, from a general perspective municipalities have to look at their overall budget needs and what mill rates would be required to achieve their goals. Then decide on the choice of whether to apply base tax or minimum tax to help further help adjust the proportion tax in any group of properties.
"In a revaluation year it can create some disruptive impacts, if there's been some very strong market changes from one year to another or over the four year period. So the council only has a limited amount of tools that they can utilize," Blank said.
"They can affect the overall tax rates for property but there isn't a lot they can do if some individual properties within the commercial sector are increasing more than others because the demand for that specific type of property was substantially higher for other commercial properties in the same municipality. " Business owners in Carlyle will be attending the town council meeting on June 19 to address the issue.
