Thursday, March 27, 2014

The Linear Taxation Argument & the Made in Flagstaff Solution

In the March 25, 2014 edition of the Edmonton Journal, David Staples wrote about MLA Laurie Blakeman and her plan for re-distribution of municipal linear taxation (pipelines, etc.) in Alberta.


Blakeman’s Bill on this issue was introduced in the Alberta Legislature this spring, but was not supported.

According to Staples, in 2012 rural municipalities (Counties & Municipal Districts) received $1.53 Billion of the $1.6 Billion in linear taxation collected.  Blakeman’s plan would be to claw all of this back and re-distribute the money on a per capita basis (population).

Broken down by numbers, a re-distribution using Blakeman’s formula would look approximately like this –

Edmonton Region -          $400,000,000+
Calgary Region -               $480,000,000+
Flagstaff Region -              $3,400,000
Town of Killam -                 $400,000

In contrast, for 2012 Flagstaff County collected $11,730,000 in linear taxes – about 55% of their property tax revenue (based on $621,000,000 in linear assessment – 47% of the total assessment).

Blakeman’s plan would see the majority of this $1.6 Billion re-allocated to just two regions, effectively funneling a huge amount of money away from rural Alberta every year.

While others may think differently, my thought has always been that a ‘Made in Flagstaff’ solution would be much better for our region as a whole.  This can be accomplished either by cost sharing or by revenue sharing on the part of Flagstaff.

We have had some reasonable success on the cost sharing side – our regional Fire Services Agreement and Flagstaff County’s Recreation Funding Policy have worked to support the towns & villages in their delivery of these services to Flagstaff residents – and we will continue to work on improvements in these areas.

There is more work to be done on the cost sharing side, and we really haven’t had the conversation yet regarding revenue sharing.

The numbers show we can be better off as a region.  In order to do so, we need to think in terms of the region as a whole, and suppress that desire to compartmentalize and be turf-protectors.

All of us.



Cheers, 

Bud James