An Alberta municipality is setting its annual budget and determining mill rates. The total equalized assessment base has increased by 10% due to new construction. How does this growth affect the tax burden on existing property owners?
Correct Answer
C) If spending rises only for new-development services, the mill rate can drop and existing owners with unchanged assessments pay about the same
When the assessment base grows from new construction, the same revenue can be collected at a lower mill rate. If the municipality's budget increases only for services needed by new development, existing owners with unchanged assessments would see stable or lower tax bills. This is a key principle of Alberta municipal finance — assessment growth from new development helps spread the tax burden.
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