Council to ponder taxes on non-profits

City council will decide whether they're going to cut a cheque to relieve the tax pressure from local non-profit organizations on Wednesday.

As part of the budget deliberation process, beginning at 3:30 p.m. in council chambers, staff have submitted an enhancement to the city manager's office budget to create an $80,000 one-time grant.

This money, which equates to 0.1 per cent of an increase to the tax levy, would cover the remaining three per cent of property tax qualified groups were required to pay after an October vote to cap permissive tax exemptions at 97 per cent across the board.

Typically, the city exempts the full amount of property tax for places of worship, non-profit organizations, private schools or other eligible tenants who apply. But in doing so this year would commit the city to breaking its policy of only allocating 1.5 per cent of the municipal tax levy to fund these exemptions.

The more than $1.2 million - based on 2012 tax rates and assessment values - worth of estimated exemptions would bring that percentage to 1.54 per cent of the annual tax levy.

If council gives the grant the go-ahead, then the city will likely cut the affected groups a cheque for the outstanding amount of property tax they have to pay this year, explained financial planning manager Kris Dalio.

But if the idea gets the nod from council, non-profit groups shouldn't be checking their mailboxes on Thursday for money.

"We probably have to wait until the actual tax rates were done and settled," Dalio said, which won't be complete until later in the spring before the May 15 deadline.

City council can also decide to bump that grant up to $125,000 to cover the three per cent of taxes owed to other agencies.

When council voted to exempt the groups 97 per cent, that left them on the hook for tax owed elsewhere.

Every year, the city collects levies on behalf of the regional district and the province (for the hospital and schools) and distributes that money out to the proper place.

"It's up to council to decide whether they just want to cover the municipal portion and leave the organizations with the other levies to figure out, or if they want to do the whole thing," Dalio said.