Wool­wich takes mid­dle road on re­moval of tax-free por­tion of coun­cil salaries

The Woolwich Observer - - NEWS - STEVE KANNON

WOOL­WICH COUN­CIL­LORS WILL GET a small bump in pay start­ing in their next term to com­pen­sate for the elim­i­na­tion of the tax-free por­tion of their stipend.

Cur­rently, a third of money paid to coun­cil­lors goes un­taxed, but the federal gov­ern­ment has axed that pro­vi­sion ef­fec­tive Jan. 1, 2019. Meet­ing this week, Wool­wich coun­cil opted for a mod­est in­crease in pay that will come into ef­fect af­ter next year’s mu­nic­i­pal elec­tion.

Based on coun­cil­lors be­ing paid $17,924 this year, the com­pen­satory move will add $1,498 to base pay, bring­ing it to $19,422. For the mayor, the base pay of $ 30,554 will go to $33,108.

All told, the changes will cost the town­ship an ex­tra $12,526 in 2019, ex­plained di­rec­tor of fi­nance Richard Peth­er­ick.

That’s based on a cal­cu­la­tion that uses a mod­est mar­ginal tax rate as its guide. For coun­cil­lors with other in­come that puts them in a higher bracket, the take-home pay is likely to go down, he noted.

Us­ing the high­est mar­ginal tax rate, as the City of Kitch­ener just did in deal­ing with the same is­sue, would see ex­penses jump by $38,027, Peth­er­ick noted, adding the town­ship has been keep­ing an eye on neigh­bour­ing mu­nic­i­pal­i­ties. Wil­mot Town­ship, for in­stance, opted for the same mid­dle ground, while Water­loo is still de­bat­ing the is­sue at the com­mit­tee level.

The mid­dle road didn’t suit ei­ther Coun. Patrick Mer­li­han or Coun. Larry Shantz, but for op­po­site rea­sons.

Mer­li­han ar­gued fu­ture can­di­dates might shy away if there is in ef­fect a penalty due to the rule changes, while Shantz sug­gested there should be no in­crease at all, with fu­ture coun­cil­lors sim­ply tak­ing the hit.

“I’m fight­ing to cut back on in­creases,” he said of his take on spend­ing and taxes, ar­gu­ing this would set an ex­am­ple.

While agree­ing “to some ex­tent” with his Ward 1 col­league Mer­li­han, Coun. Scott Hahn went with the in­crease rec­om­mended by staff. “It’s a mod­est in­crease for what we do.” In vot­ing for the rec­om­mended in­crease, Coun. Mark Bau­man said peo­ple run­ning for coun­cil do so as a pub­lic ser­vice, so the small dif­fer­ence shouldn’t be an is­sue, while ac­knowl­edg­ing that the federal gov­ern­ment is tak­ing away an in­cen­tive of sorts, es­sen­tially down­load­ing an­other cost to the mu­nic­i­pal­i­ties.

The mid­dle-ground ap­proach was ap­proved 4-2 in a split vote.

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