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Are Campbell Riverites willing to pay $288 in more taxes?
If city council makes up a multi-million dollar budget deficit through a tax increase, the average homeowner stands to lose hundreds of dollars.
Despite maintaining current service levels, this year’s city budget still stands at a staggering $3.6 million shortfall.
“Even with a starting point of no service increases, we face a large funding shortfall, said Laura Ciarniello, the city’s general manager of corporate services. “If council chose to fund the entire difference solely through a residential property tax increase, it would mean an additional $288 a year, or $24 per month, or 79 cents a day, for the average home.”
However, council is considering other options, Ciarniello said, such as potential borrowing options to fund capital projects, using limited reserve funds to continue providing city services, and analyzing appropriate service levels.
Ciarniello said council has been tasked with assessing the current service levels provided to the community and must decide if those services can continue to be funded given the financial challenges.
Services provided by the city include police and fire services; roads and sidewalks maintenance; parks; public transit; drinking water treatment and distribution; garbage collection; and bylaw enforcement.
In 2011, Ciarniello said the average home in Campbell River (valued at $268,000) paid approximately $149 a month for those services.
The city also collects taxes on behalf of other provincial and regional agencies.
Last year, the city collected $25.74 million in taxes, or 54 per cent while the school district collected 30 per cent ($14.41), the Regional Hospital received eight per cent ($3.53), the Regional District seven per cent ($3.32), and the BC Assessment Authority collected one per cent ($354,902) of the total taxes.
Council also implemented a 4.46 per cent residential tax increase last year, with a portion of that banked to put towards this year’s budget.
In total, $442,500 will go into the 2012 budget, as well as a $190,000 surplus. However, the city still faces a daunting deficit because of a $1.1 million shortfall carried over from 2011, a $1.8 million decrease in tax revenue, largely due to the reclassification of the Catalyst mill property, as well as a $1.3 million increase in contract costs and inflationary increases.
Ciarniello said the city is on the right track and relying less on Catalyst.
“Since 2002, the city has been reducing its dependence on major industry taxation, and that means less to make up now that the Catalyst property is no longer assessed in the major industry tax class,” she said.
In 2002, Campbell River relied on major industry to fund 35 per cent of its total tax levy. In 2012, major industry will fund approximately one per cent of the community’s total tax levy.
Council will deliberate the budget during a series of meetings starting Feb. 14. Financial planning meetings are scheduled for Feb. 28, March 13 and March 28. Meetings begin at 6:30 p.m. at City Hall and are open to the public. Council is expected to adopt its five-year financial plan tax bylaw on May 1.