A multi-million dollar bump to property taxes owed on Stanton Territorial Hospital by GWNT doesn’t mean a break on residents’ tax bills, Mayor Rebecca Alty said Monday.
“Residents won’t see a change. What we passed in December is the budget and we included the hospital’s assessed value,” Alty said on Monday. “I know CBC said residents would see a decrease, but that is not the case.”
The new hospital’s share of the tax responsibility was factored into determine the tax increase for the City’s 2020 budget, meaning it will remain at 1.63 per cent, City spokesperson Allison Harrower said over email. Specific tax amounts, she added, will be determined in May.
On Dec. 11, Finance Minister Caroline Wawzonek asked the legislative assembly to approve $4.5 million of additional spending, much of which will go to cover property taxes the GNWT failed to budget for, as CBC originally reported.
A property assessment of the old lot and building pegged the previous rates at roughly $773,000 per year but when a new assessment arrived last fall, the property was worth more since it had a $350-million hospital built on it.
“Essentially, it is a tax owing and will be due year over year, subject to a new assessment,” Wawzonek told the assembly in December.
The botched budgeting means the hospital will cost millions more than first expected. It also means over its projected 34-year life span, the hospital will cost NWT taxpayers about $900 million, not the $750 million the GNWT claimed it would previously.
That increase appeared to puzzle MLAs.
In December, Frame Lake MLA Kevin O’Reilly asked how the mistake occurred considering the information was available months earlier when the hospital went operational in May.
Wawzonek agreed it was unfortunate the budgeting process failed to flag the issue.
“Obviously, one could assume that you would know that the hospital that was being built would come into service during this particular year. That said, there were uncertainties as to the exact timeline of the hospital and uncertainties as to the final total (cost) of the hospital,” she said.
She promised to implement more checks and balances to avoid these circumstances in the future and more effectively plan “so that we don’t wind up back in a similar situation.”
Alty said while city ratepayers won’t be getting a break on their tax bills, the addition of Stanton Hospital on city tax roll likely reduced the need for a higher property tax this year — a figure that was originally projected to be almost 8.5 per cent without cuts.
“If it hadn’t been part of it, you would have seen an even bigger property tax increase. So it is beneficial. Like everything you want the base growing so that we can all just share the load more,” Alty said. “We knew how to do our math.”
— With files from Simon Whitehouse