Sturgeon County council shot down Coun. David Kluthe’s plan to put an unexpected surplus into tax cuts this week, with one councillor comparing his idea to former premier Ralph Klein’s “Ralph Bucks.”
Council voted 4-3 in favour of its 2013 taxation rates Tuesday. Mayor Don Rigney and councillors David Kluthe and Don McGeachy were opposed.
The vote means that non-residential taxpayers will see their tax bills grow 5.89 per cent. Residential taxpayers will pay just 4.68 per cent more.
Council also voted 4-3 in favour of a motion from Coun. Ken McGillis to put $421,226 in surplus taxes into general operating reserves. Rigney, Kluthe and McGeachy were opposed.
Council approved its 2013 budget last fall on the basis of a 5.89 per cent tax hike, but ended up with $421,226 more than it needed due to higher than expected non-residential growth.
Administration outlined a raft of ways council could use this cash, including bulking up its capital program (which was down $3 million since 2008), putting it into the contingency fund (of which more than half has already been spent), paying for flood damages, fixing bridges or lowering taxes. It also recommended lowering the residential rate to 4.68 per cent.
Kluthe moved to plow the surplus into a residential tax cut, lowering the tax hike to 0.5 per cent.
This was extra cash that should go back to taxpayers, Kluthe said.
“If we need more in 2014, we’ll work on that in 2014,” he said. “Hopefully, we’ll get lucky again and have a surplus again.”
Coun. Karen Shaw criticized the move.
“We’ve got almost a million dollars in reconstruction costs,” she said, referring to recent flood damages in the county, “and we haven’t even started the fire season.”
This was money was not a windfall, but a way to stop the county from going over the financial brink.
“Pay it back to the residents? That’s the same thing as the Ralph Bucks,” she said, referring to the $400 prosperity bonus cheques that Klein had issued to every Albertan in 2006.
The county has already spent $237,500 of its $300,000 contingency fund, said Coun. Tom Flynn, emphasizing that this cash has to be paid back next year. (Doing so would mean a 0.79 per cent tax hike, council learned.)
“If we reduce taxes this year, the net effect is going to be a bigger increase next year and the year after,” he said.
Rigney said that the county’s spending was out of control and that tax rates were growing far above the rate of population.
While the total amount of tax dollars collected by the county had increased by about 269 per cent since 2008, said Rick Wojtkiw of the county’s corporate services department, the county has also seen property values (in terms of assessment) rise by 280 per cent.
The overall tax rate today is actually lower than it was in 2008, he said, and is amongst the lowest in the region when compared to Strathcona, Red Deer, Parkland County and Leduc County.
This surplus would have a negligible impact on any one resident if put towards a tax cut, said Coun. Ken McGillis.
“This is the last mill rate bylaw that I’ll be voting on,” McGillis said, noting that he had been in office for nine years.
The county has kept its tax rates very, very low in recent years to the detriment of its residents, he continued, and now has a host of drainage, road and other legacy issues to cover. He supported putting the cash into reserves.
McGillis confirmed in an interview that his remarks meant he would not run in this fall’s county election.
Council voted 5-2 against Kluthe’s proposed tax cut, with Kluthe and McGeachy in the minority.
Tax notices go out by May 27.
