Kelowna has a severe taxation shortfall

80% of taxes collected

The City of Kelowna finds itself with a serious taxation shortfall.

According to figures obtained by Castanet Friday, the city had collected only about 80 per cent of the $148.8 million it requires for services for the 2020 budget year by the July 2 due date.

That's a shortfall of approximately $30 million.

Revenue supervisor Angie Schumacher says during a typical tax year, the city would normally collect about 95 per cent by the due date. Payments after the due date would be subject to a five percent penalty, with a further five percent applied after the BC Day long weekend.

However, due to a lengthy shutdown of the economy because of COVID-19, taxpayers, both residential and business, were given a number of breaks.

The city lowered the tax increase by 2.1 per cent, and deferred the late payment penalty date from July 3 to Sept. 1 for all residential taxpayers. The province extended the penalty date for business properties to Oct. 1

Schumacher says it's not clear yet whether the 20 percent shortfall will force the city to trigger the Revenue Anticipation Borrowing bylaw it approved in April.

That bylaw allows the city to borrow up to $150 million to keep essential services going.

"There is a lot of analysis, input and reporting that is happening to ensure the services will still be delivered how they need to be. That's why we went to council earlier with the borrowing bylaw," said Schumacher.

"Those things are in place to reduce some of the anxiety or concern. But, you really don't want to be in that position, because you don't want to be incurring borrowing costs."

For those who are struggling, Schumacher says if they can at least make a partial payment before the end of August, they won't have to incur the full penalty on the full amount.

She says some taxpayers have sent in a series of postdated cheques to cover the tax amount.

Schumacher noted the 80 per cent figure was as of the the July 2 due date, and indicated money has been coming in since then.

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