Regional council is still months away from voting on the annual budget, but a report by municipal finance staff is recommending a property tax increase.
The report recommends councillors explore two possible scenarios for the average tax bill for residential homes and commercial properties :
- A 2.1 per cent increase for 2019-20
- A 2.9 per cent increase for 2019-20
The report notes that the operating budget gap is expected to grow in the next four years. A large part of the increase is due to compensation for municipal workers, which makes up nearly half of operational costs.
“We recognize the fact that with arbitrated wage increases to really important personnel like police and fire, there’s an impact,” said Mayor Mike Savage.
The municipality has seven collective agreements. Four have an average increase close to or over the rate of inflation, which averages 2.1 per cent.
Police have an average increase of 2.75 per cent. IAFF, which represents Halifax Professional Fire Fighters Association, has an increase of 4.5 per cent. As well, ATU, which represents transit workers, has an increase of 3.6 per cent.
There is already pushback against raising property tax too much.
“I can’t support 2.9,” said Coun. Waye Mason. “I won’t vote for that.”
“I’m not generally OK right now. I’d like to see some options,” said Coun. Lorelei Nicoll.
But it’s not a question of if taxes will go up, but rather by how much. The municipality is heavily dependent on property tax, which helps to fund 80 per cent of operations.
“It’s limiting but it’s also reasonably steady as well,” said Savage. “Because it is paid for out of property tax, it allows us to make a lot of things free that other municipalities don’t have in terms of recreation and things like that.”
Despite the dependence on property tax, Savage also points out that on average, over the past five years, Halifax has kept tax increases lower than other municipalities.
“Other growth cities, Saskatoon, Regina, Edmonton, Calgary, have had much higher increases than we have,” he said.
Last year, councillors voted to approve a 1.975 per cent increase to property tax, which raised the average bill by $37. If council follows the 2.9 per cent recommendation, it will add an average of $56 per home.
“I don’t believe you raise taxes when you can. You raises taxes when you need to raise taxes,” Savage said.
After some debate Tuesday afternoon, councillors voted unanimously to pass an amendment to have staff also explore a third option of a 1.9 per cent increase which, similar to last year, would add about $36 to the average homeowner’s bill.
“I want staff to come back with some options to look at,” said Savage.