The operating budget funds all the daily activities of the municipality as it delivers services to the community, such as:
The capital budget pays for maintaining, upgrading and replacing critical infrastructure like roads, sidewalks, utilities and recreation facilities.
The operating and capital budgets are funded by a number of different sources including:
The Town of Ponoka approves an interim budget in the fall annually for the following year.
The finalized budget and municipal tax rates are approved in the spring once the Alberta Government sets the final property tax levy for education requisitions and when property assessment values have been updated for the Town of Ponoka.
Budget pressures are multifaceted, but inflation plays an important role. Inflation describes an increase in price levels for goods and services.
When the Town of Ponoka's costs increase due to inflation, so does the pressure to increase the municipal portion of property taxes to help offset inflationary costs and ensure continued reliable delivery of municipal services is supported.
If the amount of property taxes collected stays the same or increases at a rate below the rate of inflation that means that there are fewer dollars available to sustain existing Town services and programs, and reduced financial capacity to invest in the future of the Town.
For residential property taxes:
For commercial property taxes:
Each year, the Town of Ponoka determines how much money it will need to fund the annual budget to pay for all of the services, infrastructure upgrades and maintenance it provides for the community.
The overall tax rate is then calculated by dividing the amount of money required to fund the budget by the total assessed value of all properties in town.
TAX RATE = Total Budget Funding ÷ Total Assessed Property Values
Factors that can affect property assessment values are the age of homes, the number of homes in the community, and the number and size of businesses in the community.
To calculate the amount of municipal property tax that you pay as a homeowner, the tax rate is multiplied by the assessed value of your property and divided by 1,000.
YOUR PROPERTY TAXES = Tax Rate x Your Property's Assessed Value ÷ 1,000
Please note that the overall increase in your municipal property taxes from year to year is directly related to the annual change in your property’s assessment value.
Here is a hypothetical example of how property taxes are determined:
If the Town of Ponoka determines it requires $100,000 to fund the annual budget; and
There are three municipal properties in the community. One is valued at $200,000, the other is valued at $250,000 and the third is valued at $350,000. All three properties total $800,000 in assessed value.
Let's do the math:
$100,000 divided by $800,000 equals a tax rate of 0.125
If your property's assessed value is $200,000, your municipal property taxes would be:
0.125 (tax rate) x $200,000 (assessed property value) ÷ 1,000 = $25
Due to the Alberta Government’s unexpected 2025 education tax rate increase of 10.8 per cent for Town of Ponoka residents, Council lowered the municipal property tax increase to 1.25 per cent – down from the proposed 3.25 per cent increase that was initially approved by Council last fall in the Interim Budget. This was done to offset to impact of the education tax increase.
Although Ponoka’s municipal tax increase has been reduced to 1.25 per cent, property owners in town may see a larger increase in their overall tax bill. This is due to two main factors:
