Saanich residents could see their property taxes go up almost five per cent in 2019. Black Press File.

Saanich taxpayers facing prospect of 5% tax hike in 2019

Saanich faces the prospect of raising property taxes by almost five per cent in 2019 to help cover the cost of a new provincial tax and labour agreements among other circumstances.

This figure per cent emerges from a report that staff have prepared for Monday’s committee-of-the-whole council meeting to help frame future budget discussions by spelling out various parameters.

While this framing has historically happened closer to the fall of any year, the coming budget cycling promises to be different for several reasons, starting with the fact that a new group of councillors will have to cope with a new set of financial circumstances not faced by the current council.

They include the implementation of the new Employer Health Tax (EHT) and rising labour costs as the salaries of municipal staff and Saanich firefighters are scheduled to increase — conditions that have all contributed to the estimated future tax hike of 4.97 per cent.

Likely aware that many could see this figure as politically explosive, the report uses red ink to note that this and other other figures in the report represent “high level preliminary estimates” that “will be updated as required for the proposed 2019 budget.”

Early reactions, of course, focused on the figure of nearly five per cent.

“Seriously, a nearly five per cent tax increase in 2019?” asked Stan Bartlett, chair, of Grumpy Taxpayer$ of Greater Victoria. “Council and the administration knows there’s little appetite for large tax increases among ratepayers, business owners and renters.”

Saanich should tighten up management, share more service, focus on core responsibilities, sell assets, use higher revenues revenue from the economic boom to moderate taxes, scale down or delay capital projects, and moderate pay and benefits, he said.

“The most significant driver for 2019, and most years, will be labour costs,” he said. “So maybe it’s finally time to exercise some fiscal discipline in that regard,” says Bartlett.

So what lies behind the figure? “The most significant cost driver for 2019 will be labour related costs,” it reads.

Known cost drivers include a hike of two per cent under Saanich’s agreement with employees represented by the Canadian Union of Public Employees (CUPE) and a hike of 2.5 per cent for employees represented by the International Association of Firefighters. Staff also anticipates that the Employer Health Tax will presents a “significant challenge” for Saanich, by increasing costs by about $1.78 million among other pending increases.

This said, other known unknowns loom. They include the pending expiration of the collective agreement governing Saanich Police officers. Saanich also appears uncertain about labour costs for exempt staff and elected officials.

On the revenue side, staff anticipates that revenues from building permits and new construction taxes will remain relatively steady. One wild card is the pending loss of revenue once five communities will have switched fire dispatching services to Surrey.

As for budget cutting scenario, the report notes that “simple options to find savings are not readily available.”

In fact, the report notes that council has been hesitant to make cuts, even after asking staff to bring forward options. ‘This suggests that the historical reduction scenario approach is working,” it reads.

If councillors do not consider a tax increase of almost five per cent acceptable, they need to offer staff direction which services are “of low priority and available for elimination.” This list, according to staff, appears to be short though. Legislation makes many municipal services mandatory, while a “vast majority” qualify as “core” services.

”[Relatively] few are truly discretionary services,” it reads.

Councillors will consider the report about a month after they had approved the 2018 budget with a property tax increase of 3.07 per cent.

Bartlett credits this timing. It allows more budget scrutiny, he said.


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