Mayor Cliff McNeil-Smith said Sidney’s decision to increase property taxes by 3.76 per cent responds to a number of realities.
“It reflects the lower taxes that we approved during the first two years of the pandemic and the need to transition away from the federal-provincial COVID Safe Re-start grant funds the Town received, and return to normal revenue levels,” he said Tuesday.
It also allows staff to maintain the level of services that citizens expect, while also investing in priorities like community safety, climate change, essential infrastructure, and community amenities, he added.
McNeil-Smith made these comments Tuesday as councillors unanimously approved a revised 2022-2026 financial plan. Sidney councillors had started budget discussions with a proposed increase of 4.98 per cent.
According to staff, the net impact of the tax increase on the average residential property is about $60 for the year, or $4.97 a month. Total municipal tax for the average residence will be about $1,646 for the year or $137 per month. The estimated tax increase for the average commercial property – valued at $1,027,400 – is about $202 for the year. Staff said that even with this increase, the average commercial property owner’s tax hit continues to be lower than in 2019 thanks to a 10 per cent cut in 2020.
This year’s overall increase in revenue from property taxes marks a jump from 2021, when the municipality increased revenue from property taxes by 2.7 per cent. In 2020, Sidney rolled the tax hike back to zero in the face of the COVID-19 pandemic.
Staff said federal-provincial restart funding of more than $2.75 million has allowed Sidney to keep tax increases artificially low during the past two years — a move that won’t be available once that funding is used up. According to a staff report, Sidney is using $958,300 in 2022 to keep taxes lower than what they would normally be with $400,000 available in 2023 and $34,000 in 2024.
The revenue increase (which still requires final ratification) shapes up to be the first of many of comparable magnitude. Staff said the annual increase required to fund on-going operations — without any adding new services — is about 3 per cent on average to cover negotiated personnel increases, inflation, contributions to the reserve and unavoidable cost increases.
“This increased revenue requirement is partially met each year through growth in the tax base,” the staff report reads. “(Whatever) remains must be raised through tax increases. If we do not raise taxes sufficiently to cover the shortfall, we are slowly eroding our financial sustainability.”
Overall, Sidney’s operating budget totals $25.5 million while its capital budget program totals $8.3 million, with most of the projects funded through reserves. The money will fund almost 100 capital projects including $2.5 million in infrastructure replacement projects, and $520,000 in active transportation investments through sidewalk and pathway improvements.
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