Proposed tax increases entered with a bang, and left with a whimper as city budget talks closed Wednesday evening.
Sticker shock originally accompanied a projected 8.48 per cent tax but after three days of discussion and cuts, Yellowknife property owners can now expect a 1.63 per cent tax increase, pending official approval.
The final day of the line-by-line budget review focused on money transferred from taxes to save for larger capital projects. Mayor Rebecca Alty proposed reducing the transfers to be added from $1.34 million to zero.
That motion passed with Couns. Julian Morse, Niels Konge, Stacie Smith and Shauna Morgan opposed. Alty cast the tie-breaking vote.
As the city faces large projects in the future, Morse asked during discussion if council was “picking our pockets this year, to have to come back and spend it next year.”
An alternative, which Morse and Coun. Shauna Morgan supported, was to transfer recently unfettered $230,000 into the capital fund to avoid shortchanging it, meaning it would maintain the capital fund balance. Under this plan the tax rate would’ve been 2.37 per cent.
“These are some wonderful numbers,” Coun. Niels Konge said about reducing taxes. However, for him, it was partly a philosophical question: should capital funds be saved and then spent? Or should council borrow to pay for facilities, then allow residents to cover the expense of facility as they use it?
While substantial tax reductions would have council “leave this room looking like heroes, are we really heroes in a year or two?” Konge asked. “That’s the question I’m asking myself right now. Are we going low and what is the cost?”
Go cheap now, you’re going to pay for it later,” he added later.
Coun. Steve Payne argued it “wasn’t doom and gloom” regardless of how council moved.
“We’re giving the people what they want,” he said.
For Morse, however, this was more about stable, predictable tax increases as opposed to fits and starts. The money will be spent in any event, he said. Morgan concurred with this, arguing that it would ease the financial strain on lower-income residents.
Speaking to reporters after the vote, Alty said the capital fund was healthy and it came down to “being diligent year on year to ensure the capital projects we’re supporting, (and) factoring in the operations and maintenance cost of adding … and getting something replaced.”
Mayor reflects on budget process
Closing off talks, Alty said she was comfortable with the final product and said prioritizing efforts was key during deliberations, including asking if projects were urgent or could be delayed.
“We always have that big sticker shock at the beginning and then we go through and analyze everything,” she said about the budget debate, adding residents can still contribute before the budget becomes official on Monday.
There is still work to be done on the city’s finances: part of its municipal funding shortfall, comes from the $11 million owed by the territorial government.
When it comes to delivering services covered in the budget, “that’s when we really need the GNWT funds,” Alty told the press following the budget talks.