The Feds giveth and the locals will taketh away

As the Conservatives sat down in Ottawa and delivered their bounty of tax credits, rebates and minority government goodies to a receptive public, on the local scene it was a different story with a very different financial outcome. In Podunk, it was more like that hand in your pocket bank commercial, as once again city council has come to the taxpaying Podunkian looking to go a little deeper into the wallet or purse.

Monday night city council approved the first three readings of is budget and tax rate bylaw, which will increase taxes locally by 4.87 per cent. The headline of the Daily News described the city’s take on the nights events as a “step in the right direction”, an interesting term for a dwindling tax payer base that must be getting weary of constantly having their mail bring tidings of increasing tax loads.

A flashback to the election campaign of 2005 might be useful, at the time of the mayoralty debate the magic bullet of tax increases didn't seem to get much play, rather it was more of a hold the fort kind of attitude. As the new council approved its spending plans for 2006, many of the problems facing the city back in November, continue to haunt the place as we travel into May.

If paying more in taxes is going in the right direction, perhaps we need to phone On Star for some travel guidance. The road right now is winding, pot holed and full of frequent surprises, not all of them of the enjoyable type.

The Daily has all the details on what’s to come in your mail box this June.


CITY BUDGET ‘STEP IN THE RIGHT DIRECTION’
By Leanne Ritchie
The Daily News
Tuesday, May 2, 2006
Page One

The City will seek another half million dollars from its taxpayers this year.

However, the increase is still less than what the city needs to get all the way back on to the right financial track.

“It’s not a budget that will meet all the requirements to get us back to a sound financial condition but it’s a step in the right direction,” said Jim Bruce, chief financial officer.

At a special meeting Monday night, council approved the first three readings of its budget and tax rate bylaw. Council plans to increase taxes by $516,000 or 4.87 per cent.

Councillors originally looked at a list that included up to an 18 per cent increase, however pared that down to 4.8 per cent.

“I think the taxes in Prince Rupert are on the top end, if not the highest end. I know in the small-business sector they are among the highest end of like sized municipalities,” said Coun. Tony Briglio.

“I would not want to see any more pain inflicted on our citizens.”
Those homeowners who saw the largest increase in their property assessments this year will bear the brunt of the tax increase because municipal taxes are based on a combination of assessed value and tax rate. Those who saw little or no increase will actually see a reduction.

For example (including the $100 increase in the homeowner grant from the province.) a home valued at $175,000 in 2005, which saw no assessment increase in 2006, will pay $599 less in municipal taxes.

A $175,000 home that saw an increase of 15 per cent in value will pay $160 less in taxes, a $175,000 that saw an increase of 24 per cent in value will pay $104 more in taxes and a $175,000 home that saw an increase of 30 per cent will pay $279 more in taxes.

Given that homeowners will see a $100 increase in their homeowners grant this year, and that it is likely taxpayers are facing a similar tax increase next year, Coun. Joy Thorkelson questioned whether council should consider increasing the amount this year in order to ease the pain next year. “I’m wondering if this budget is too skimpy on what we cut back,” she said. “I’m wondering if we have cut too deep.”

However, Coun. Ken Cote argued that the community has yet to see an increase in employment.

“We have quite a high receivable in taxes that are not paid. If you drive up taxes too high you’ll end up increasing that receivable,” he said.

“Unless people have good-earning jobs, they can’t pay you.”

Council also acknowledged that the homeowner grants, a flat increase of $100 from the province per home, do benefit those with homes of less value more than those of a higher value.

“Given that, we look at our community as a family and we are asking half a million dollars from our family, those that have a bit more could pay a bit more and I don’t see any problem with that myself,” said Briglio, who will be facing around a nine per cent tax increase.

Projects that the city plans to proceed with this year, using the half a million, include fixing the works yard roof, RCMP cells, fire hall roof, and Charles Hays track. They will also begin to put a small amount of money back into the reserve funds, which were spent during those years the city anticipated receiving taxes from Skeena pulp mill operations but did not.