County of Paintearth raising alarms over proposed oil and gas assessment changes

A change in the assessment model used for oil and gas will impact the tax revenue rural municipalities collect

By Kevin J. Sabo For the Advance

The County of Paintearth is joining a growing number of municipalities that are concerned about proposed assessment changes for oil and gas released by the Government of Alberta.

The Government of Alberta recently announced that four options are being assessed that will ease the tax burden on oil and gas companies, however rural municipalities are crying out that all the options on the table are bad.

“The situation is dire,” said County of Paintearth Reeve Stan Schulmeister in a press release.

“In order to accommodate the proposed changes, service levels our ratepayers have become accustomed to will have to decrease, along with the footprint of County operations.”

Simply put, a change in the assessment model used for oil and gas will impact the tax revenue rural municipalities collect.

Information provided to the County of Paintearth show that they could lose between eight and 13 per cent of their usual revenue.

“In the worst-case scenario, this means lost revenue of $2.1 million in the first year alone,” said Schulmeister, before indicating that tax revenue losses would continue in later years.

“With the Province having released a series of proposed changes to the assessment model used for linear oil and gas properties, there is a very real threat to how the County derives revenue, which at this point, is primarily driven by industry property taxes, not residential and farmland taxes,” said County Chief Administrative Officer Michael Simpson, in an email statement.

Options before the County to absorb some of the blow of the decreased funding include any or all of the following: raising residential taxes between 120 to 200 per cent, increasing non-residential business and industrial taxes between 11 and 20 per cent, and cutting the County of Paintearth workforce by up to 43 per cent.

“None of these scenarios are optimal where our ratepayers, both residents and businesses, are concerned,” said Schulmeister.

“Even if we cut our operating expenses by 15 per cent, we would still need a tax increase to make up this lost revenue in subsequent years. The potential impact on Paintearth County and the quality of life for its citizens could push us past the brink of feasibility.”

This assessment review comes at the same time as costs continue to escalate within the County, and within all rural municipalities, with the Government of Alberta beginning to charge municipalities for RCMP services.

“Paintearth’s policing costs start in 2021 at about $70,000 and hit over $220,000 by 2023,” said Simpson.

“Add that in with the fact that some oil and gas companies simply aren’t paying their property taxes anymore and you’ve got a sort of situation where approaches to service delivery will need to be re-thought to protect the taxpaying farmer from how the province’s decisions are impacting Paintearth, and all counties in Alberta.”

The press release issued by the County of Paintearth does point out that no decision has been made on oil and gas assessments yet, and the County encourages area residents to contact MLA Nate Horner at either his Drumheller or Stettler Constituency Offices and urge the government to re-think this plan.

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