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Fiscal council set to bring in largest tax hike ever?
It’s about as sobering a report as you can get and, if you’re wondering what city council is up against with the core services review, this is it.
A report from acting city manager Kathleen Soltis paints a bleak picture for taxpayers.
“Unless the City of Prince George decreases expenses and/or increases non-tax revenues, the estimated year 2013 total municipal property tax increase will be 7.09 per cent,” she said in her report to council.
That’s if nothing changes.
Bear in mind that the public cry over getting things in order at city hall has been spurred largely by almost a decade of tax increases about four per cent, per year. The last time there was a tax hike of close to seven per cent was with a special levy for road repairs.
So, a year into the reign of the rein-in-city-expenses crew, and we’re looking at the largest tax increase in recent memory.
That’s if nothing changes and, bearing in mind that one of the first acts of this council was reduce staffing levels at city hall by 28 positions, that’s already been done and we’re still looking at a huge tax increase.
The other sobering part of Soltis’ report is the relatively little impact on taxes that implementing the core services review has had, so far.
Those “opportunities” (to use the crass term from KPMG) are cutting $53,000 in salary and benefit increases at the library, cutting $20,000 from the IPG service agreement and other miscellaneous expenses would result in a tax hike of 6.45 per cent in 2013.
Bear in mind, council is only really deciding now what else to implement from the core services review so council, having been elected on fiscal prudence, will have a bitter pill to swallow if it brings in the largest tax increase in recent memory.
It should also be pointed out that the projected tax increases for 2014 and 2015, with the core services review implementations to date, are 5.44 per cent respectively, still larger increases than what originally got the community howling about taxes.
So what is causing the increase? According to Soltis’ report, servicing external debt is the largest single expenditure increase at just over $1.4 million (which decreases to an increase of $295,105 in 2015). The second largest expenditure is city staff salaries and benefits, which will increase by $1.1 million in 2013 and $1.2 million in 2014 and the same again in 2015 … even with 28 fewer staff.
General infrastructure costs and road rehabilitation are both pegged for $800,000 increases next year. The RCMP contract will cost $619,347 more than last year, but it also decreases over the following two years.
Getting the finances in line is not an easy task.
Of the above areas, the only one that council can readily attack is staff salaries and benefits.
And some of them wonder why the union is upset.