Taxes. They’re a fact of life in Morinville, and a central focus for town council during the last term and this election.
At issue is the town’s growing tax-supported deficit. Morinville spent close to $1.6 million more than it took in last budget — a tax-supported operating deficit that was set to grow to $2.5 million next year. The town has had to tap its utilities money to balance its books — cash that was supposed to be used to run, repair, and upgrade the town's water, sewer, and trash services.
The Gazette called Morinville mayoral candidates Simon Boersma and Barry Turner this week to talk about how they would address this problem and other economic issues if elected.
Candidate Shane Ladouceur, who filed his nomination papers Sept. 20, declined to participate in this Q&A.
Growing deficit
The town’s 2021 budget shows that Morinville’s tax-supported revenues dipped about 1.8 per cent from 2018 to 2021, while its expenses rose 22 per cent. Salaries, wages, and benefits rose 29 per cent.
“I have a massive concern with the fact that our dollars going out have totally increased,” Boersma said, especially when it came to staffing costs.
Boersma criticized council for having considered multiple years of three-per-cent tax hikes under its long-range financial model, and said such a plan would repel tax-generating business investment.
“I think we need to stop talking about raising taxes,” he said, and instead freeze expenditures and do a service-level review to see if the town is spending its money wisely.
“I’m not saying we need to make cuts,” he said, but cuts might be necessary.
Turner said much of the town’s higher costs in recent years was due to the opening of the town’s new Morinville Leisure Centre.
“When you’re opening a $30-million recreation facility, you need staff.”
Turner said council started with a skeleton crew at the leisure centre to reduce initial costs and embarked on an administrative reorganization that would save $170,000 a year. They also set staff wages at the midpoint of those offered by similar Alberta communities to get quality workers.
Turner rejected the idea of a tax freeze, saying the town had to raise revenues to keep up with inflation and the cost to run the rec centre.
“If we don’t, what we’re going to be faced with is significant service-level cuts,” he said.
Getting more growth
Boersma said the town should seek additional tax revenue through business and residential development and noted that the town has both a large supply of land and two new schools available.
“That has the ability to give us economic growth.”
Boersma proposed a two-year tax break for new businesses that would see them pay 33 per cent of their taxes in their first year of operation, 66 per cent in the next, and 100 per cent thereafter. This would help more companies establish themselves in town and help the town leverage its proximity to road, rail, and air routes to attract agri-business and hydrogen companies.
“We have to be open to business,” he said.
Turner said the town already gave companies a one-year 50-per-cent tax break for new non-residential construction. More breaks might help new businesses, but council has to respect residential taxpayers, too, who are already paying the third-highest tax rates in the Edmonton region. Turner also noted that the town had equalized mill between 2010 and 2018 that gave businesses a roughly 15-per-cent tax break — one that did little to draw new business.
“The most critical factor in investment decisions is the size of your market,” Turner said, citing evidence from corporate site selectors — the more people you have, the more likely you are to draw certain investments.
Turner said Morinville is well positioned for growth with its two new schools and rec centre, and is already seeing significant development in the Westwinds region. The town gained $1.9 million in commercial assessment last year despite the pandemic, and could see more growth post-pandemic as people seek out less crowded rural neighbourhoods.
Turner said the town could raise more revenue by shifting more of the tax load from homeowners onto businesses without deterring investment, so long as it kept taxes in line with the rest of the region.
“As long as your business tax rate is comparable to other jurisdictions, you’re still in the game.”
Next week, The Gazette will ask the mayoral candidates about community engagement.
