Homeowners taxes now going down 11.07 per cent

City council has finally finalised its 2011 budget.

City council has finally finalised its 2011 budget.

And, in sharp contrast to indications at the conclusion of its three-day budget marathon February 24-26, everyone except major industry is now getting an 11.07 per cent reduction compared to the general municipal taxes they paid in 2010.

However the overall tax revenue target set in February is unchanged and therefore  Rio Tinto Alcan faces an 8.66 per cent increase in its tax bill.

To figure out why there is such an apparent about face on this year’s budget, you have to go back to the 2010 budget deliberations.

At that time council, trying to buffer against the significant drop in tax revenues it would face this year as a result of the closure of the Eurocan Pulp and Paper mill, increased tax revenues by 20 per cent.

But it also changed the way it apportioned that tax increase amongst the various classes.

Instead of the usual method of major industry picking up 80 per cent of the total tab with the rest spread over light industry, business/other and residential, etc., council spread the pain by increasing each and every class by 20 per cent.

That had the effect of reducing the percentage of the total paid by major industry to 75 per cent.

Last month, when council settled on a 2.57 per cent tax revenue increase for this year, the impression was left that this increase would, as last year, be applied across the board.

Although that would have dropped the major industry share to 71 per cent, RTA, because about half the Eurocan property was no longer rated major industry, would have faced an increase of just over three per cent.

There was, however, still the possibility of minor changes between the classes.

Which is what councillor Mario Feldhoff tried to do at a March 2 special meeting to settle tax apportionment.

However, his proposal that there be a reduction in the commercial class hike to be offset by an increase in residential found support from only colleague Corinne Scott with mayor Joanne Monaghan and councillors Corless, Goffinet and Halyk opposed.

Councillor Gerd Gottschling was absent.

Halyk then proposed there be no change in the apportionment for major industry, in other words that it stayed at 75 per cent.

That passed with only Scott opposed – Feldhoff had withdrawn on a conflict of interest.

Which appeared to be that.

However, given apparent confusion with some members of council as to what the tax implications of that decision were, it was slated to be brought back to council’s regular meeting of March 7.

But once there it was tabled until a Committee of the Whole meeting March 14 with Halyk absent this time.

At that meeting, after municipal manager had run over the implications of the various options, Gottschling proposed going with A, maintaining the 75 per cent major industry share.

He pointed out industries could claim their taxes as an expense while the homeowner was paying with after-tax dollars. Therefore, Gottschling said, he did not think it unfair to charge industry 75 per cent.

And there were people in town for whom a 2.57 per cent increase would be a hardship.

 

After Scott and Goffinet had sought

clarification on a number of points, Hall pointed out that since Gottschling’s motion was the same as Halyk’s from 12 days earlier, there was no need for it.

Gottschling having therefore withdrawn his motion, Scott proposed option C which would have seen major industry pick up 71.82 per cent of the tab meaning a 4.14 per cent increase for RTA and zeroes across the rest of the board.

Scott said the reason she supported this option was it kept residential and business classes the same as last year while the increase for RTA was half that in Option A.

However, when it came to a vote Scott found herself alone and so option A held – minus 11.07 per cent for all classes except major industry with RTA paying 8.66 per cent more.

The final dollar numbers are:

q Major industry – $14,759 million (RTA $11.772 million, Eurocan $2,987 million)

q Light industry – $970,000 (includes those parts of Eurocan operation that are now assessed as light industry)

q Residential – $3.14 million

q Business/Other – $766,575

 

 

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