Churches, service groups and other non-profits will begin paying a portion of their property taxes next year, following a decision of Penticton city council Tuesday.
The move was approved by a 6-0 vote, but with a pair of councillors expressing reservations about how it will affect recipients’ ability to continue doing their work.
“If we start taking away some of their exemptions, it will restrict how much they can help, so there’s my slippery slope concept,” said Coun. Judy Sentes.
Coun. Katie Robinson echoed her concerns.
“I’m somewhat worried that we’re kind of opening up Pandora’s box here, but until we try it, we won’t really know,” said Robinson.
“We’ll see how big an impact it is and we’ll go from there.”
The move came two weeks after council approved by a 4-3 vote an extension of a deal to waive property taxes – estimated at about $50,000 annually – for a new residential development on Ellis Street that’s part of the economic incentive zones program.
Coun. Frank Regehr, who was strongly opposed to the EIZ extension, refused to draw a link between the two decisions.
“There’s still just one taxpayer – in effect – at the end and this is one of many decisions that will be made through budget development,” said Regehr.
“I saw this as a bit of a limitation on the charge” taxpayers may take as the demand for tax waivers from the non-profit sector grows.
In a departure from the past practice of 100% tax exemptions, owners and tenants of the 127 properties on the list will now receive 94.35% of their requested tax waivers, leaving them to pay the remaining 5.65%
For example, the Penticton and District Community Arts Council will now have to come up with $711 to top up an $11,865 exemption for Leir House.
The 5.65% cut will bring the total of all permissive tax exemptions to 1.68% of total projected property tax revenue, as required by a policy update approved by council in April. Council chose 1.68% to match this year’s ratio.
Exemptions totalling $591,000 were requested for 2020, but with the reduced amount will ring in at $557,000. The total granted for 2019 was $531,000.
Mayor John Vassilaki recused himself from the discussion Tuesday because he owns two properties for which exemptions were sought by their tenants.
Council is set to grant final approval to the exemptions at its next meeting Oct. 1.