Council revisit discussion over local tax increase
An increase in 2011 B.C. Assessments for local properties prompted another council discussion about a potential tax increase in the village this year.
As reported in the Lakes District News edition of Dec. 8, 2010, during village budget talks councillors were split in the decision on how much to raise taxes for 2011.
Most councillors agreed an increase in taxes was necessary to make way for a number of village initiatives, including a municipal bio mass heating project and employing a full time sustainability coordinator.
Councillor John Illes and Coun. Quentin Beach both voted for a seven per cent increase in municipal taxes, while Coun. Luke Strimbold requested a zero per cent increase and Coun. Eileen Benedict suggested a five per cent increase.
Due to the tied vote, mayor Bernice Magee was given the final say, deciding to increase municipal taxes by seven per cent.
Now that B.C. Assessment has increased the value of most local properties, more revenue will be coming in to the village, even before any increases in municipal taxes are applied.
Because of this, Cheryl Worthing, Village of Burns Lake’s director of finance and soon to be chief administrative officer, presented a detailed report to council showing the effect a two per cent, a three per cent and a four per cent increase in municipal taxes would have on village revenues. (See table on page 7)
Worthing said to council that the largest increase in assessments was for Lake Babine Nation.
“There was a five per cent increase in property assessments for most of the homes within the Village of Burns Lake this year,” she added.
She also commented on a Ministry of Finance announcement in which the province is providing an additional $200 increase in the homeowner’s grant to B.C.’s Northern and rural homeowner’s that have been hard hit by the economic downturn.
Worthing explained to council that the $200 increase expands on the current homeowner’s grant for B.C. property owners and is eligible to residents with homes valued up to a $1 million.
The grant is currently worth $570 to homeowner’s, which means those eligible for the Northern rural benefit will receive $770 in total.
The purpose of the homeowner’s grant is to help reduce the amount of residential property tax British Columbians pay. The home owner grant applies to taxes paid by British Columbians to their municipality.
Councillor Quentin Beach asked Worthing if the homeowners grant increase would apply to Burns Lake and that he still supported his previous budget decision to increase taxes by seven per cent. He added that if the increased homeowner’s grant applied to Burns Lake the $200 extra would help residents to soak up a seven per cent tax increase.
“If we are going to do this [increase taxes] we have to do it right,” he said.
Councillor John Illes said the increase in homeowner’s grants definitely applied to Burns Lake.
“It is for all communities that are outside greater Vancouver, the Fraser Valley and Victoria,” he said.
During a recent press conference regarding the increase, Minister of Finance Colin Hansen said he hopes municipalities would not raise property taxes to offset the increased homeowners grant. He said the increase was given to provide residents in Northern communities with a little extra breathing room.
Councillor Luke Strimbold then asked council if the $200 increase in homeowner’s grant was going to come every year. “If we increase taxes, the increase is there forever,” he said.
Councillor Eileen Benedict said, “That’s not correct, we can lower taxes.”
“When is the last time that happened,” questioned Coun. Strimbold.
Councillor Beach said he was still interested in keeping the tax increase at seven per cent, despite the increased revenues the village will receive from increased property assessments.
“We can use the $200 increase in homeowner’s grant to really make a difference [to the village budget],” said Coun. Beach.
“I don’t understand Coun. Beach’s comments, a two per cent increase will give us enough to do all that we need. Don’t forget we have local businesses to consider. We have just been talking about how good it is that there are new businesses starting up in town. I just don’t think at this point in time we can afford to jump the taxes like that,” Coun. Benedict said.
Benedict then made a motion to increase taxes for 2011 by two per cent, however the motion was not supported by any councillors and was defeated.
Councillor Illes said he was semi in support of Benedict’s motion, however he felt that a two per cent increase did not provide any breathing room for the village if gaps in expenditures were to come about.
“I am more in support of a three per cent increase. There has been a large increase in property assessments for Lake Babine Nation and they may not be expecting that,” he said.
Mayor Bernice Magee said, “Historically there has been a delay in the Lake Babine Nation payments, so it is not a though we have the cash already in hand.”
“The world is full of unknowns,” said Coun. Illes adding, “I would agree with no more than a three per cent increase.”
“If we don’t get the downtown core redevelopment right, there is not much point in doing it. There is no point in just planting a couple of trees. With this $200 increase in the homeowner’s grant we have a real opportunity to take advantage. It takes a bold leader to increase the taxes. I am prepared to face unhappy taxpayers. In five years though, they will be happy,” Coun. Beach said.
Coun. Illes then made a motion to increase taxes by three percent. This motion was also not supported by ay other councillors and was defeated.
Mayor Magee suggested to councillors that they may wish to think about the possibility of a tax increase further and said the decision could be deferred until the next council meeting on Feb. 8.
Councillors agreed with mayor Magee and made a motion to defer the decision.
Village of Burns Lake 2011 tax rate scenarios presented to council
• Seven per cent municipal taxes increase based on 2010 property assessment rates = total revenue of $1,230,636 or an increase of $80,509.
• A two per cent increase in municipal taxes based on 2011 property assessment rates = total revenue of $1,249,023 or an increase of $98,896.
• A three per cent increase in municipal taxes based on 2011 property assessment rates = total revenue of $1,261,269 or an increase of $111,142.
• A four per cent increase in municipal taxes based on 2011 property assessment rates = total revenue of $1,273,514 or an increase of $123,387.