A hike to education taxes in Tuesday’s provincial budget could result in an overall property tax increase of five per cent.
The provincial budget included a $69 million increase to the education property tax levy. The increase means the levy will likely increase by 2.9 per cent, not the zero per cent increase municipalities had anticipated.
When added to the city’s 2.9 per cent municipal tax increase, overall property taxes will rise to about five per cent for homeowners, indicated Dean Screpnek, the city’s general manager of corporate services.
“I think the 2.9 per cent is reasonable given the economic times, but I think there might be some reaction to the combined municipal and schools being at five per cent. It is perhaps too high,” said Screpnek.
“The challenge for us is we don’t have any control on the school requisitions,” he said, noting the province sets the education levy, leaving municipalities to collect the money.
Grant funding falls
Tuesday’s budget also means a 40 per cent reduction in Municipal Sustainability Initiative (MSI) grant funding compared to initial promises.
The city will receive $12.2 million in MSI dollars in 2010/11, more than double last year’s figure, but far short of the $20 million promised when the program launched in 2007.
Screpnek said that although he is disappointed about the reduction, the good news is the city has already done some number crunching and has the money in place to cover the shortfall. The city twice reduced its expected MSI grant totals in the 2010 budget.
“We had anticipated the reduction commitment in MSI back when we were preparing our 2010 budget,” said Screpnek. “We had a suspicion this was going to come true and it appears that it has.”
According to Screpnek, the MSI money is filtered into three separate areas — growth, a municipal fund and utility fund. These areas already had excess funds that would have normally been carried through to next year’s budget.
Still, back when the MSI program was first announced in 2007, the city would have been able to take on more projects with the $20 million.
“I am still obviously pleased the province is committing MSI funds, but I would prefer they are funding at the level they suggested back in 2007,” Screpnek said.
Mayor Nolan Crouse pointed out when MSI funding was first unveiled, the government made a big deal about how it would be span over a period of 10 years. Now, he said the funding is basically limited to one year at a time, making it difficult to plan several years down the road.
“We had built a plan and of course there is nothing we can do about it. It just means a lot of the things we had planned, we are going to be going at a lot slower,” said Crouse, who is also not impressed with the near elimination of funds in the Green TRIP program, which was supposed to be used towards LRT and park ‘n’ ride expansion.
“We are just barely able to plan one year at a time because it’s not sustainable planning and thinking.”
Property tax notices are mailed in May.
