City council cuts back tax hike

City council approved a 1.75 per cent tax increase during a special council meeting last week, down from the 3.44 per cent increase approved in the initial budget.

For a typical Prince George home, the reduction will mean a savings of $38 compared to the original planned increase. However, it means the city’s portion of property taxes for a typical home in the city will still rise by $39.

“It’s 50.1 per cent of what we started with. We’ve cut the increase in half,” Coun. Garth Frizzell. “It is as low as possible. I’m worried for what happens next year, if we go lower than 1.75 per cent.”

Non-residential properties would see greater savings, thanks to an average 25 per cent reduction in the school tax portion of property taxes offered by the province. A typical light industrial property will see a 0.31 per cent overall property tax decrease, a typical major industrial property an overall 4.08 per cent decrease and a typical business property will see an overall 6.91 per cent savings.

Coun. Kyle Sampson and Brian Skakun urged their colleagues to consider a tax increase of only 0.88 per cent, but their motion was defeated.

In a report to council, city manager Kathleen Soltis and director of finance Kris Dalio said a deeper reduction in property taxes would mean more layoffs.

“As of April 27th, 98 staff were no longer scheduled for work in their own positions; of the 98, 18 employees had been reassigned to other jobs. At this time, there are also 40 vacant positions that are not being filled,” Soltis wrote in a report.

Further reductions to the tax increase would have required between five and 37 additional layoffs, depending on how much the increase was reduced, her report said.

“We are a service industry. Municipal business is two-thirds labour,” Dalio said.

“The non-labour is so tight. And the nonlabour is the static dollar value we need to run these services. When we talk about reducing expenses, it will impact labour at some point. We’re just too much of a labour-dominant industry.”

Coun. Murry Krause said he wasn’t interested in seeing any further layoffs at the city.

“These people were counting on that income and relying on it,” he said.

Every city department is looking for cost savings to try to offset the approximately $900,000 per month loss of revenue the city is facing, Soltis said.

“My concern is about that $900,000,” Sampson said. “My question is what is our plan to make up that money? Right now we’re talking about the tax levy, but the big elephant in the room is our loss of revenue.”

It’s city administration’s job to “close the gap,” Dalio said.

The reduction of the property tax increase was part of a suite of measures approved by city council on Thursday night.

Council deferred $24.8 million in capital projects, eliminated city council’s costof-living wage increase, eliminated the 10 per cent penalty on October’s utility bill and postponed the second five per cent penalty on late property taxes from taking effect in September to Oct. 1.

If utility bills aren’t paid by Jan. 1, they will be added to the property taxes owing on a property and begin accruing interest.

“This is the kind of a bit of gesture to the citizens that I’ve been asked for,” Coun. Terri McConnachie said. “If you can pay on time, please pay on time. If you can’t, there is a little leeway.”

City council also received information on the possibility of closing the Four Seasons Leisure Pool for the remainder of the year, but opted to wait until provincial public health restrictions are lifted to make a decision on reopening the pool or not.