During a special budget meeting Wednesday night, Sackville councillors directed town staff to prepare a 2018 budget with property tax increases that would affect both homeowners and businesses.
If, as seems certain, council approves the increases on December 11, the residential property tax rate would rise one cent to $1.56 per $100 of assessment. Treasurer Michael Beal said that would cost someone with a home assessed at $100,000, an extra $10 next year.
The basic commercial rate would rise 1.5 cents to $4.545 per $100 of assessment and add an extra $15 on next year’s tax bill for a business assessed at $100,000.
Province chops tax base
All seven councillors present at last night’s meeting endorsed the tax hike after hearing that the province had chopped Sackville’s overall property tax base by $9.2 million to compensate for problems caused by the new digital property assessment system.
CAO Phil Handrahan said the town already knew it would lose revenue as a result of hundreds of successful assessment appeals this year, but did not expect a further $7 million reduction in assessment to compensate for the previous year.
Beal said it’s the first time in his 24 years with the town that he’s seen a reduction in its provincially set tax base, in this case from over $629 million this year to just under $620 million in 2018.
Sackville got shafted
Councillor Bill Evans said he understood that the province was freezing assessments next year and that all municipalities would be facing revenue losses.
“[But] a nine million dollar cut in our tax base is not at all what we expected,” he added. “There is only, I think, one other community which took a cut more than ours and that was Moncton, which is more than 10 times bigger than we are,” Evans said.
“Sackville really got shafted here.”
Handrahan said that when Service New Brunswick informed the town about the $9.2 million cut in the tax base, town staff were forced to rejig the first draft of the budget released on November 20.
Treasurer Beal took council through a list of reductions from the first draft to the second that, he said, would not affect services. They included a $10,000 reduction in the projected budget for ice maintenance and skate sharpening at the Civic Arena; $7,000 less than projected for street trees and ballfields and the elimination of $6,000 for an external Heritage Officer.
To read the list of reductions from the first budget draft to the second, click here.
All in all, Beal said he was able to shave nearly $120,000 from the budget leaving a shortfall of almost $62,000.
He presented town council with five choices: (1) increase residential property taxes by one cent per $100 of assessed value and 1.5 cents for businesses; (2) cut $62,000 in town services; (3) take the money from the town’s operating reserves of $97,888; (4) reduce the capital fund which pays for such things as roads and sidewalks or, (5) borrow $62,000.
Mayor Higham, who doesn’t vote except to break a tie, said he would favour taking $10,000 out of operating reserves and $50,000 out of the capital fund.
Councillors favour tax increases
However as councillors spoke, it became clear that all seven favoured a tax increase to close the $62,000 gap. (Councillor Michael Tower was absent.)
Although Councillors Aiken, Phinney and Black called for a review of town services, no one at Wednesday’s meeting wanted to cut any of them now or chop capital funding.
Several expressed concern about taking money from operating reserves when it might be needed for unexpected expenditures such as the snow removal costs that came in $100,000 over budget three years ago; and no one favoured borrowing the money.
After hearing from Beal that Sackville taxes have not gone up for three years, Councillor Joyce O’Neill said she would favour the small tax increase.
“I hear people telling me the town’s spending way too much money, but if we turned around and cut services, they’d be at us a lot harder,” O’Neill said. “They’ll say ‘we want our services.'”
“I know raising taxes isn’t popular,” said Councillor Megan Mitton adding that if people are paying ten, twenty or thirty dollars more per year, then it spreads the costs out.
“That’s what the purpose of taxes is,” Mitton said. “I like taxes,” she added. “Is that political suicide?” she asked with a laugh.