Trent Ernst, Editor
Council has passed the 2015 Tax Rate Bylaw, and residents will be happy to note that there are no new taxes.
Of course, those residents looking for a tax cut will be disappointed as there’s no tax cut, either. Instead, Council has decided to freeze residential taxes for 2015, neither raising them or lowering them.
This follows a five percent reduction last year, which saw the average resident pay $30 less in taxes on average.
In fact, Council held all the tax rates the same this year as last, with the sole exception of the business tax rate, which they dropped by ten percent.
That follows a five percent drop in the tax rates last year, which brings the amount of tax that a local business pays per thousand dollars down to 2.67 times the amount that a resident does.
The Canadian Federation of Independent Businesses advocates that property taxes for businesses should not be more than twice what residents pay in a municipality.
In 2013—the most recent year that has been analyzed—the provincial tax gap between residential and commercial property tax had declined from 2.93 in 2008 to 2.65 in 2013.
This puts Tumbler Ridge in line with the provincial average.
Councillor Will Howe was disappointed that the rest of council was not willing to give residents a reduction on their tax burden. He proposed that the District drop residential taxes by ten percent and business taxes by 25 percent, a move that was not supported by any of the other councillors. “We have a surplus budget,” said Howe. “It’s not that we’re going to lose our tax base. We live like kings here.”
Councillor Darryl Krakowka was in favour of zero across the board. While he did not want to see tax rates go up, he didn’t want to see them go down, either. “The first thing they said at the local government training in Prince George was ‘don’t lower taxes.’ Because if you lower taxes this year, you’ve got to raise them even more next year. We have a zero percent increase, that’s a pretty good deal.”
As a business owner, he says, he’s worried that dropping business tax rates this year will lead to a steeper tax increase once the mines come back. “It scares me to decrease my own taxes as a business owner by 25 percent, but then have to go back up by twice as much next year.”
While there was no talk of raising taxes, there was a lot of debate on holding taxes at where they were versus decreasing them. Councillor Joanne Kirby said she was torn between these two options. “Yes I want to help businesses,” she says. “But will cutting taxes help businesses if we have to raise it in a year or two? I don’t know.”
Other Councillors proposed other options: Councillor Helen Scott proposed a five percent discount for residents, and zero for businesses, while Councillor Rob Mackay proposed lowering taxes by 12.5 percent for businesses, as a middle ground between Howe’s 25 percent and Krakowka’s zero percent.
In the end, Council decided to lower business taxes by ten percent, but hold at the current rate for residents. Mayor Don McPherson says discussions like these are extremely hard. “It’s tough. You want to be the nice guy and help, but we also have to run this town. If I thought businesses would come here if we dropped our taxes 25 percent, I would do it in a heartbeat. But there are other issues, bigger issues that we need to address.”
Accountant Clive Freundlich says that, while Tumbler Ridge’s property taxes, at $803 for the average property, are amongst the highest for the Peace. However, comparing the cost per capita, Tumbler Ridge had the lowest municipal charges of any city or town last year, and has been consistently in the top three least expensive places to live since 2009.
“If you look at just property taxes, you miss the big picture,” says Freundlich. “Tumbler Ridge has the lowest user fees. We have low parcel taxes. Some municipalities just shift the tax burden from property taxes to parcel taxes. In our budget discussions to date, we’ve just compared general tax rates. We’ve only been talking about the property taxes, which are the highest in the region, but when you compile everything, we’re lowest.”
People who pay close attention to these things will notice that the 2015 residential mill rate has jumped quite dramatically, from 3.5521 to 4.1797. But this, says Financial Manager Chris Leggett, is not the number that people should be paying attention to. “The mill rate is just a plug in the whole equation that allows you to do the calculations,” he says. “Let’s say you want to collect 1.5 million in property taxes from class X. We take the average property assessment of that class, then the total number of properties, and we calculate how much needs to be paid for each property. The mill rate is just what is needed to achieve that end result revenue.”
He says that if City A has a mill rate of 2.5, and the average property value is $200,000, while City B has a mill rate of 5, but the average property value is $100,000, people looking at just the mill rate could make the argument that City B is gouging taxpayers. “But in truth they’re both paying the same amount of taxes.”
The increase in the mill rate is not because the town has raised the amount of taxes that the average tax payer is paying (the average property owner is still paying about $803), but because the value of the average property has dropped.
The 2015-2019 Financial Plan, while the source of much discussion, was far less contention, passing unanimously. While Council took a final look at special projects and capital spending, they made no changes at the May 13 budget meeting.
Much of the most recent discussion revolved around the Core Services. These are the day-to-day costs of running the District and maintaining the infrastructure and include everything from wages for District employees to road repair to protective services to the Community Centre.
This year’s Core Services is $1.7 million higher than last year’s budget, which was a cause for concern for Council. CFO Barry Elliott says that the District has just re-negotiated with the union, and staffing costs are up two percent across the board.
Elliott says the General Government budget, which he is in charge of, is up 6.99 percent for this year. “Most of that is because we are planning on adding another position, as well as additional hours for the grant writer. That’s the lion’s share of the change. My office is a bottleneck to what Council wants to see done.
The Public works Core Budget is up nine percent, or $172,063. Operations Manager says this is because he’s working on moving from reactive to proactive. “You don’t want to wait until the infrastructure breaks,” says Beale. “This means that substantial costs have been added back to the core budget that have been bled out of this area in the past. For instance, there is very little road repair that has been done, so I’m adding that back in. As our infrastructure is getting older, we’re going to see more and more need for repairs.”
The budget for the golf course is up nearly 88 percent over last year. Elliott explains that, while they have recently signed a lease to have someone look after the place, he wanted to make sure that there was enough money in the budget to make sure that everything functions properly this year. An additional $118,916 has been added to the budget over last year’s.
Developmental Services are also up dramatically, nearly 44 percent, or 206,228. Economic Development Officer Jordan Wall explains this is because there was no one working in that department last year to look after it.
And while Council was looking at ways to cut core spending, in the end, it remained untouched, and the budget passed as presented with the final reading happening on May 15.