During its Oct. 1 regular meeting, Rocky Mountain House town council debated the idea of a residential property tax ‘sub-class’ for McNutt Subdivision.
For years, Rocky Mountain House town councillors say they have been fielding inquiries from McNutt Subdivision residents regarding a perception that because the subdivision does not have certain municipal services such as paved roads, sidewalks, or streetlights, it is in effect, subsidizing the rest of the municipality through its property taxes.
“They have asked a number of times in the past that they are not receiving the same services as everyone else, but yet they are being taxed on the same mill rate,” says Coun. Tina Hutchinson. “And so this would just classify them in a different class.”
Starting in early 2024, council began exploring the concept of creating a residential sub-class, as McNutt residents currently pay a similar tax rate to other Rocky Mountain House residents.
“I think what they’re saying is, ‘hey, over the years we haven’t got what everybody else has but yet we’re paying for it,'” said Coun. Dale Shippelt. “You guys in town are paying to have the power go to your street light and we are also paying for power to go to a street light that we don’t have.”
Town documents show the land on which the McNutt Subdivision is located was annexed into the Town in 1981.
Contemporary documents regarding taxation of the subdivision state that property tax is an ad valorum tax – meaning it is solely based on the value of a property.
The property tax a person or a business pays has no relation to the direct services received or used by the ratepayer. Property tax is not a fee-for-service, but a way of distributing the cost for services and programs that Council determines necessary or desirable for the community.
An Aug. 1 report shows a potential sub-class would see an overall tax revenue reduction of $9,648, coming from calculated deductions from amenities such as sidewalks and streetlights.
Questions were raised by council that if McNutt was given sub-class status, would other areas such as Old Town need to have similar breaks to remain fair and equitable, as Old Town also lacks certain services that other areas of town have.
Since then, the Town sent out a survey to all 48 households in and adjacent to McNutt, as well, it hosted an open house for residents that was held in September.
In 11 completed surveys, residents responded that they generally enjoy how quiet the subdivision is given its proximity to town amenities, but also commented on high taxes, lack of plowing in the winter, and extra costs associated with maintaining septic systems.
While no resolution on the creation sub-class has been passed, council did pass two motions to address other concerns at McNutt.
Those include reducing the speed limit in McNutt Subdivision from 50 km/h down to 40 km/h.
Additionally, McNutt residents had been responsible for cleaning up gravel in ditches adjacent to their properties. Council passed a motion to not only have the Town clean up gravel every spring in McNutt, but also in Old Town and along 42 Ave.
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