Sidney plans to increase the amount of revenue raised through property tax by 4.98 per cent — or $606,665 — with the final figure still subject to change as budget discussions get underway in earnest.
Andrew Hicik, Sidney’s director of corporate services and chief financial officer, presented that figure during the regular council meeting on Jan. 24.
As it stands now, the added annual financial impact of the proposed increase for the average home assessed at $841,300 is $79, Hicik said.
Hicik also used the occasion to remind the public that higher assessments will not automatically lead to higher property taxes as the impact on individual properties varies, depending on changes relative to average changes in assessment.
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The 2022 budget foresees expenditures of just over $20.16 million with fire and policing representing nearly one-third of expenditures. As for revenues, Sidney’s budget projects $7.54 million in revenues from sources other than property taxes –with just under $13 million coming from property taxes.
Overall, the plan projects Sidney needs $806,668 in additional property taxes. With $200,000 coming from new construction, the required increase from existing taxpayers stands — for now — at $606,665, said Hicik.
“Included in that amount are several new budget items that have not yet been approved by council, primarily supplemental requests,” Hicik said, later defining supplemental items as one-time or ongoing additions to existing service levels.
“Everything we cover tonight has been built into that budget increase,” he said. “It is easier to cut things than try to add on the fly. So we are going in worst-case and if any of the supplemental items or other items in the budget are not approved, they can easily be removed and amend the proposed tax increase.”
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While some increases lie outside the control of the municipality — for example, plans by the provincial government to download RCMP dispatching — staff had to justify any requested increases outside the base budget as per standard practice, he said. Staff simply did not apply inflation across the board in making requests.
While the proposed tax increase of 4.98 per cent is twice as large as inflation (staff show inflation at 2.45 per cent), Hicik said it is not the most relevant measure. Oil and construction material prices have a greater impact on the municipality’s budget than the typical basket of goods that makes up the consumer price index, he said.
While 2022 is another budget marked by the COVID-19 pandemic, Hicik pointed to the state of funds received from senior spheres of government. The municipality received just over $2.7 million in safe re-start grants, funding that has given the municipality flexibility. This money has not only allowed the municipality to replenish the funds borrowed internally but also, at least as a starting point, maintains the decision to continue a 10 per cent cut in business taxes, reads a report accompanying the budget.
But the report also noted the municipality will have to eventually raise its current taxation rates to historical levels, as the municipality uses up the safe-restart grant. The municipality now has to manage what the report called “an important balancing act” as it returns the required level of tax funding to ensure important community services are not compromised.
“Keeping the tax increase artificially low this year will only make our job harder in the next two to three years,” it reads.
Budget discussions continue on Feb. 7 with a committee-of-the-whole meeting that will give the public the first opportunity to comment.
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