Morinville residents are poised to pay about $30 more in taxes this year now that town administration has found close to $700,000 in savings and cash in their revised budget.
Morinville town council voted 4-3 on May 11 to keep this year’s tax hike at one per cent (councillors Rebecca Balanko, Stephen Dafoe, and Scott Richardson opposed).
Council approved a one-per-cent tax hike in December as part of its 2021 budget, which assumed 1.5-per-cent growth and two-per-cent hikes to the seniors and education levies.
None of those assumptions proved correct. In late April, council learned the town saw just 1.42-per-cent growth last year, while the seniors levy rose 3.98 per cent and the education levy stayed flat (although homeowners ended up paying more due to how the province allocated it).
These realities meant the town would need a 3.6-per-cent tax hike to fund its budget. Instead of paying $42.86 more in all taxes, the average homeowner would pay $95.94 more.
Council balked at the proposed hike, and asked administration to come back with ideas on how to reign it in, including the possibility of changing the split mill rate by cutting residential rates.
Cash and savings
Council had previously heard that it needed to find an additional $261,945 to fund the budget.
But that was before accounting for the $462,771 the town was set to get from its new recreation cost-sharing agreement with Sturgeon County, council heard from finance consultant Graham Isbister. The town also had about $312,273 in unexpected savings due to pandemic-related layoffs and facility closures.
These savings and funds would let the town fund the budget with a one-per-cent increase, council heard. Under such an increase, the average residential homeowner would expect to pay $28.87 more in all taxes this year ($16.90 municipal, $10.40 education, and $1.56 senior) — the monetary equivalent of two dozen Tim Hortons muffins. Commercial property owners would see a $310.19 average increase, compared to a $497.85 jump under a 3.6-per-cent hike.
Isbister also explained the impacts of increasing the town’s split mill rate from its current level of 1:1.1 by cutting residential rates. Raising the rate to 1:1.2 in this way would cause the average homeowner’s taxes to fall by $116.63 and the average business owner’s to rise by $497.85.
Richardson, Dafoe, and Balanko argued for a change to the split rate, saying it would save residents money during tough economic times.
Mayor Barry Turner opposed such a move. Even with these latest changes, the town still had a $1.6-million tax-supported operating deficit, one that would have been even bigger had it not been for one-time COVID-related savings, he noted. Changing the split rate as proposed here would result in even bigger deficits that would snowball in years ahead.
“We cannot, cannot, cannot continue along this path,” he said.
“If we do, we will be setting up our community for some extremely difficult decisions.”
Business owners have also suffered due to the pandemic, and would see a much smaller tax hike if the split rate was kept at its current level, said Coun. Lawrence Giffin. The town was currently covering its operating deficit by raiding its utility reserves, and needed that money to fix its aging infrastructure.
“We know there are expenses coming up, and if we don’t plan for them, they are going to hit us hard in the future,” he said.
Balanko won 6-1 support to get a report later this month on the budget impacts of a one- to five-per-cent pay cut for all non-unionized staff. Turner opposed the move, saying town staff had already endured enough this year through repeated layoffs and noting how the town recently changed its wages to reflect the regional average.
Council was set to finalize the 2021 tax rates May 25.
