Sackville’s mayor, deputy mayor and town councillors will each start losing hundreds if not thousands of dollars on January 1st when the federal government starts taxing their full municipal salaries.
“The federal government is giving us a pay cut, which really stinks,” Councillor Allison Butcher said at last Monday’s town council meeting.
She was referring to the federal government scrapping a policy that has been in effect since 1953 allowing municipal and provincial office holders to escape paying taxes on up to a third of their salaries.
The tax-free allowances covered work-related expenses that did not have to be accounted for. But the federal government says the perk for municipal and provincial politicians isn’t fair to other taxpayers who do not qualify for such tax-free allowances.
In Sackville, the mayor receives $4,794.92 as a tax-free allowance on top of his annual salary of $9,589.84 for a total of $14,384.76, while the deputy mayor gets $2,838.42 tax free in addition to $5,676.84, for a total of $8,515.26.
Sackville councillors receive $2,518.62 tax free in addition to their annual salaries of $5,037.24, for a total of $7,555.86.
Butcher, who is a director and teacher at a non-profit children’s play school, said the new tax policy will make a difference to her. (Her tax bill is likely to rise by several hundred dollars.)
However, she added that after raising municipal taxes earlier this year, councillors can’t justify claiming more money for themselves to cover their higher income tax bills.
“It stinks that it will mean a bit of a difference for us, but I can’t in good faith suggest to the taxpayers, who are now paying more this year, that they should pay me more,” she said.
Treasurer Mike Beal told council that it could cost the town up to $16,000 to make up the difference so that councillors would not take a pay cut.
He said it’s been over 10 years since Sackville’s municipal politicians received a major raise, although he noted that their salaries are adjusted every year to cover 90 per cent of the cost of inflation. He said, for example, that if the annual cost of living rises by two per cent, the mayor and councillors get raises of 1.8 per cent.
Councillor Bruce Phinney said he would like to see pay comparisons with other municipal councils including the one in Amherst, where pay rates are higher.
In 2012, politicians in Amherst approved an annual salary for the mayor of $34,580; $23,127 for the deputy mayor; and $20,438 for each of the five councillors. (The clerk was unavailable Friday, so it was not possible to ascertain this year’s exact salary figures.)
Councillor Andrew Black noted that Amherst has fewer councillors than Sackville.
“They operate with six councillors,” he said. “I think an easy way for us to do this is go from eight to six and then take the pay from the other two councillors and spread it out among six.”
Councillor Bill Evans described the tax-free allowance as a loophole that the federal government is closing to raise more revenue to pay for programs that benefit all Canadians.
“I think that we are well compensated,” Evans added, referring to the health, dental and life insurance that members of council get.
“Nobody wants to pay more taxes, everybody wants to get more pay,” Evans said, adding, it’s “a pretty clear conflict of interest” for councillors to give themselves more pay.
“I think we do our bit like every other taxpayer and pay our taxes,” he said.
In the end, Mayor Higham said it seemed to him that there was no support on council for an immediate raise to compensate for the pay cut, but that town staff could gather figures to determine how Sackville’s pay scales compare with other municipalities.