Village council approved a 2.37 per cent tax increase for residents at council Tuesday (Feb. 19), but the future of the business tax rates could be getting some more scrutiny.
In the Harrison council chambers, residents were given the opportunity to share their thoughts on the village’s five-year financial plan, which was given final adoption Tuesday. The plan included a small increase in taxes for all classes, including business and recreational properties.
These taxes only make up a quarter of the village’s revenue, with the rest of the funds coming from grants and other self-made revenue.
Allan Jackson, who was the only resident to speak at the council meeting on the budget, felt this was the wrong approach.
“I don’t like the idea of council giving up so much income,” he said.
“We are a community of single-family residents,” he added. “I know my house doesn’t pay the bills.”
He suggested the village raise business taxes to create more a more sustainable income base. Residents can’t write taxes off, he added, but businesses can, making an increase in business tax the right way to go.
RELATED: Harrison tax rate to go up 2.37 per cent
Right now, individual businesses pay 3.18 times more property tax than individual homeowners. This number, called the multiplier, was decreased in 2017, as a large property moved into the business class. Before, businesses paid 3.5 times more property tax than residents, but with the new property coming in, the council at the time decided the multiplier could be reduced.
The reduction helped drop Harrison Hot Springs to the 50th lowest community for business taxes in the province, out of 162 communities. In 2018, Harrison was 39th lowest.
“It is a goal that the previous council wanted to establish a rate between business and residential that were about equal in the province,” financial officer Tracey Jones said.
Jones did note that Jackson’s concerns about the long-term sustainability of the village’s finances could potentially be allayed by the village’s reserve funds.
“Infrastructure can be paid for by reserves, by taxation or by borrowing,” she said. “I think this projected forecast (of money going into reserves) is starting to address Mr. Jackson’s concerns.”
In 2016, the village made $303,000 in contributions to reserves. In 2019, the village expects to put $772,000 into reserves. By 2023, that number is expected to grow to just over $1 million.
RELATED: Average Canadian family spends 43% of income on taxes: study
Councillor Gerry Palmer also spoke to Jackson’s comments about the sustainability of the village’s finances.
“It does seem to me in terms of long term to perhaps take a look at (the breakdown between residential and business taxes) over the course of the year,” he said. “That’s a political decision, and I don’t know if necessarily the decision that was reached by the previous council is one that we need to follow through.”
Despite Jackson’s concerns — which councillor Ray Hooper said he had heard from other residents during the public consultation — council voted to approve the draft financial budget.
Councillor Samantha Piper voted against the financial plan. She had suggested during the meeting that council voluntarily give up approximately $200 to $300 of each council member’s remuneration to go towards reducing the tax increase.
“It’s not anything against any time or devotion or dedication that anyone around this table does,” she said. “It’s just an effort in order to do something on our part to make a difference in our community.”
Reaction from the other council members was mixed.
Hooper said that if they were to do something like that, he would want to make sure the money goes back to the residents and not the businesses. He suggested, as an alternative, that the money be donated to the Agassiz-Harrison Community Services.
Councillor Michie Vidal and mayor Leo Facio carefully spoke against the motion from more personal grounds.
“I think everyone has to realize we’re all on different levels … depending on our circumstances,” Facio said.
Palmer agreed.
“It’s easy for me to say that’s fine, but I also recognize not everyone is in that position,” he said.
“I just don’t want to see us mix apples and oranges,” he continued. “The budget is one thing and the issue of council compensation is another thing.”
He suggested the topic of council remuneration should be brought to an independent committee.
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