Tuesday, September 29, 2020

September 28 Council Meeting: Status Quo for $62,278 in Non-Profit Property Tax Exemptions

One of the abilities of municipal councils is to grant permissive property tax exemptions. These grants exemption certain properties from property tax. These permissive tax exemptions must be reviewed annually.

At last night’s Langley City council meeting, the 2021 Permissive Property Tax Exemption Bylaw was discussed and given first, second, and third reading.

There are two types of permissive property tax exemptions in Langley City. The first exemptions are for City-owned property which is leased to the following organization:

Langley Seniors Resource Society - 20605 51B Avenue
Langley Stepping Stones - 20101 Michaud Crescent
Langley Community Music School - 4899 207 Street
Langley Lawn Bowling (Outdoor) - 20471 54 Avenue
Langley Community Services Society - 5339 207 Street
Governing Council of the Salvation Army - 5787 Langley Bypass

These are clear-cut exemptions as it would make limited sense for the City to tax itself.

The second type of exemptions are more ad hoc. Previous councils have granted permissive tax exemptions to:

Global School Society starting in 2001. Private schools receive a statutory property tax exemption for the land school buildings and other improvements are on in BC. This permissive exemption covers the remainder of the property owned by the school.

Langley Care Society (Langley Lodge) starting in 2005 as a result of the BC Assessment Authority revoking their partial property tax exemption which they previously received since 1974.

Langley Hospice Society and Inclusion Langley received permissive tax exemptions for select properties starting in 2010.

These four permissive tax exemptions will reduce Langley City’s property tax revenue by $62,278 in 2021.

Unlike the provincial or federal governments, municipalities are not allowed to run deficit budgets. This means that the $62,278 must come from other property owners. If Langley City did not provide $62,278 in property tax exemptions in 2021, property tax could be reduced by 0.2% city-wide.

Because of this impact on property tax, no new property tax exemptions have been approved (even though new requests are receive annually) since I’ve been on council.

This year, the City received four new requests for additional properties to be exempted. The following list shows the organizations which applied, their property locations, and City permissive tax exemption requested.

Langley Memorial Hospital Auxiliary - 20560 Fraser Highway: $37,390
Inclusion Langley - 20689 Fraser Highway: $8,093
Langley Food Bank - 5780 203 Street: $12,332
Eureka Temple Society - 20701 Fraser Highway: $26,373

Langley Council received around 50 pieces of correspondence from supporters of the Langley Food Bank about their request for a permissive tax exemption.

Mayor van den Broek put a motion forward to include the Langley Food Bank to receive a permissive tax exemption in 2021. There was a good discussion about this, but in the end the motion was defeat by Councillor Martin, James, Albrecht, and me.

While I believe the foodbank is an important part of our community, I did not feel comfortable giving new permissive tax exemptions. There are two reasons why.

We have many non-profit organizations in our community that do great work. They do not receive permissive tax exemptions. Council does not have a policy on which organizations should or should not received permissive tax exemptions. This would be a hard policy to create. If I were to grant a new permissive tax exemption to one non-profit, I would feel like I would have to for all that applied.

As I said earlier, granting a permissive tax exemption is not free money. For each permissive property tax exemption granted, property tax must be increased to cover the loss in revenue. This increase is paid by all remaining property owners.

For these reasons, I view the current exemptions we have in place as grandfathered. While no policies exist for new permissive tax exemption requests, I will remain hesitant to vote in favour of granting new permissive exemptions.

Non-profits are encouraged to apply to Langley City’s Community Grant program. The Langley Food Bank has received community grants from Langley City in the past (including in 2020.)

The status quo will likely be maintained for permissive property tax exemptions in 2021.

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