B.C. city left with $600K budget shortfall after hundreds of property values were reassessed
Fort St. John will pull money from other sources this year but could hike taxes in 2020
Successfully appealing a property assessment can save the owner money — but when too many people do it, the city can take a hit.
In Fort St. John, B.C., more than 170 property owners appealed their assessments this year.
An unexpected drop in property values, and the lower taxes derived from that, caught the city off guard and left council scrambling to balance the budget.
"In January, we received a $38 million assessed value against commercial businesses and then [B.C. Assessment] essentially reversed most of that three months later," said David Joy, general manager of corporate services with the city.
"That had a profound effect on our budget."
The northeastern B.C. city is now facing a shortfall of more than $600,000 after the unexpected change.
Overall, commercial property values in Fort St. John dropped by 1.9 per cent this year compared to the original assessed value.
The city also saw a smaller drop in assessments for residential values and major industry, but the main issue came from commercial properties — which fall under a higher tax bracket.
"I will be asking B.C. Assessment about their original assessed values that they've provided to us in January," Joy told CBC's Daybreak North.
"We didn't question it at the time because we had 20 additional commercial businesses come on during 2018, plus some natural progression."
He wants an explanation for why the value of properties changed so significantly in just a few months and questioned the assumptions made in the original assessments.
Potential tax hike in 2020
Fort St. John won't be hiking taxes this year to make up the budget shortfall, Joy said, but will instead pull from reserve funds and investment income.
Next year could be a different story, though.
"The 2020 budget process is going to be very tough," he said.
"The likelihood of us maintaining the same tax rate is going to be challenging."
With files from Daybreak North