Sackville Town Council has delayed passing the 2018 municipal budget until January after asking the provincial minister of local government for nearly $60,000 to cover its financial shortfall.
It means that the town will defer any property tax increases until council hears from the minister, Serge Rousselle.
In a letter to Rousselle, Mayor Higham blames the province for the town’s predicament because Service New Brunswick oversaw a new tax assessment system that inflated the assessed value of many properties.
To correct the situation, the province reduced Sackville’s assessments by $9.2 million cutting the town’s tax base from $629 million to just under $620 million.
“It seems that they’re penalizing our taxpayers for their [in]competency,” Higham said during Monday’s council meeting. “That doesn’t seem fair.”
Figures attached to Higham’s letter indicate that the province’s financial assistance of $51,854 to cover the town’s lost revenue falls far short of the $108,500 in actual losses. Therefore, the town is seeking an additional $56,646 to make up the difference.
To read Mayor Higham’s letter, click here.
At a special budget meeting on November 29, all seven councillors in attendance asked town staff to draft a 2018 budget that included a small property tax increase to cover the budget shortfall.
Council chose the tax hike instead of cutting services, borrowing the money or taking it out of the capital budget or operating reserves.
The tax increases would have raised residential rates one cent to $1.56 per $100 of assessment, (an extra $10 for a home assessed at $100,000) and business rates one-and-a-half cents to $4.545 per $100 of assessment, ($15 more for a business assessed at $100,000.)
To read my coverage of the November 29 meeting, click here.
Town seeks other changes
Mayor Higham’s letter also asks Serge Rousselle to consider changes in the way the province calculates how much money Sackville receives in “equalization” payments.
The equalization system, which includes a component called “core funding,” is designed to ensure that Sackville residents receive an average level of service at an average level of taxation when compared to residents of similar-sized communities.
Sackville’s treasurer presented a chart to council in November showing that nine other similar-sized towns will be getting an average of $669,753 in equalization and core funding payments next year while Sackville will receive only $66,007, about one-tenth as much. (Sackville receives only the core funding component and no equalization payment.)
To view Treasurer Beal’s chart, click here.
To view a fuller comparison of these similarly sized towns including comparisons of their tax bases and more explanation of core funding and equalization, click here.
Other Sackville grievances
During Monday’s meeting, the mayor said he also wants the province to include Mount Allison’s student population in the calculations for provincial equalization support as well as the use of Sackville’s firefighters and police to respond to emergencies on the TransCanada Highway.
He says Sackville should also be more fully compensated for the subsidized services, including fire protection, that the town provides to the residents of local service districts (LSDs) outside its boundaries.
“Those are all elements that our taxpayers are paying,” Higham said. “We’re looking just for fairness.”
Provincial grant calculations
This table shows that, for municipal tax purposes, Sackville is one of nine towns in Group C. There are a total of seven groups of communities and the groups (A to G) are based on the role communities fulfill within their region and the corresponding scope and level of services they provide.
The core funding that these towns receive from the province is calculated at 16 cents per $100 of the non-residential tax base (excluding provincial and municipal properties).
The province compares Sackville to the other towns in Group C when it calculates equalization payments designed to allow each community to provide an average level of municipal services at an average tax rate. Municipal services include fire and police protection, garbage collection, recreation and cultural services as well as the maintenance of sidewalks and streets.
According to the province, the standard expenditure calculated for Sackville is $1,386 per capita (based on group average and adjusted for density). With a per capita tax base of $113,213, the province says Sackville can raise $1,410 per capita on its own at an average tax rate and therefore, does not qualify for equalization funding.
(Sources: Statistics Canada, 2016 Census of New Brunswick, 2018 Tax Bases and Community Funding and Equalization Grant and Marc André Chiasson, Communications officer, New Brunswick Department of Environment and Local Government & Office of the Attorney General, December 1, 2017).