Municipalities don't welcome Alberta education property tax increase

The organization that represents Alberta's cities, towns and villages is concerned about the increase to the education property tax announced in Thursday's provincial budget. 

The tax makes up 29 per cent of the education operating budget. But the provincial government wants to raise taxes, so they make up 31.5 per cent of that funding in fiscal 2025 and 33 per cent in fiscal 2026. 

Total tax revenue is forecasted to be $9.9 billion in 2025, including $3.1 billion coming from the education tax. The revenue from the education tax are expected to increase to $3.4 billion and $3.6 billion over the next two years. 

"The increase represents a shift of the provincial tax burden onto the property tax base, when the province has other, more transparent and efficient revenue generation options," Tyler Gandam, president of Alberta Municipalities, told CBC News on Friday.

"In contrast, property taxes are the main source of revenue for municipalities who are managing increased costs and expectations."'

Municipalities would be happy to have the province collect the education tax itself, said Gandam, who was surprised to see, what he called, a substantial increase in the rates.

The province has estimated people in Edmonton will pay $93 more this year, while Calgarians are expected to pay $239 — more than double.

During a news conference Friday, Premier Danielle Smith said Edmonton and Calgary are getting the most new schools in the province's plan to create more spaces. The budget sets aside $2.6 billion over three years to build and modernize schools. 

Smith wants ratepayers in the two cities to contribute to the increased cost. 

"We've got to build out 100 new schools over the next six or seven years, and being able to have a little bit of support from the communities that are are going to be the greatest beneficiaries of that new construction is part of what we had in mind," she said. 

Calgary Mayor Jyoti Gondek echoed Gandam's sentiments after the budget was released Thursday. She said cities are mandated to collect education taxes but she wished they didn't have to be in the middle. 

"To the point that many people have made to us about sending out two separate bills, one for the provincial share and one for municipal, that just costs taxpayers more money," she said. 

"So we can't justify that."

The province froze education taxes last year. The tax rates in the coming fiscal year will be $2.72 per $1,000 assessed values for homes and farms, and $4.00 per $1,000 for commercial properties. 

MLAs are on a constituency break next week, but will start to consider the budget when they return to the legislature on March 10.