The concerns being expressed over skyrocketing assessments is overblown, says letter writer. (News Bulletin file photo)

The concerns being expressed over skyrocketing assessments is overblown, says letter writer. (News Bulletin file photo)

LETTER TO THE EDITOR: Skyrocketing assessments won’t mean skyrocketing tax increases

Property assessments don’t impact property taxes as much as city budgeting does, says letter writer

To the editor,

Re: Assessments inflated, Letters, Jan. 12.

The concerns being expressed over skyrocketing assessments is overblown. This is because, when assessments go up, the mill rate goes down.

Every year council approves a budget for that year’s city spending. Then they divide the total assessed value of all properties into the city’s total budget to determine that year’s mill rate. If everybody’s assessment doubled, the mill rate would be cut in half.

Therefore, if the average assessment increase for the city is 34 per cent, anybody whose assessment goes up 34 per cent will see no difference in what they would otherwise pay. If your assessment only went up 25 per cent, you will actually see a tax decrease. Only if your personal assessment increase is more than the average will there be a relative increase in your taxes.

This does not take into account council’s annual budget increase. Because the city budget went up 5.9 per cent, everybody can expect taxes will go up around 5.9 per cent, even if nobody’s assessment changed from last year. I hope this explains how municipal taxes work. While it may be hard to believe, an average 34 per cent assessment increase will not create a 34 per cent windfall for city coffers. The real driver behind municipal tax increases is the city budget, not your assessment.

S. I. Petersen, Nanaimo

READ ALSO: Nanaimo’s top 10 highest-assessed properties for 2022

The views and opinions expressed in this letter to the editor are those of the writer and do not reflect the views of Black Press or the Nanaimo News Bulletin.

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