Campbell River’s 2022 residential tax increase will be less than originally reported, after city council made a decision to redirect downtown revitalization reserve funds to the operations budget.
After this year’s budget deliberations, which concluded at the start of December, the tax increase for 2022 was reported to be 3.94 per cent. But this rate hike has now been reduced to 3.13 per cent, which equates to an increase of about $37 dollars for a home of average value (about $620,000) in Campbell River.
This was made possible by a decision by city council on Dec. 15 to amend the 2020-2031 ten-year financial plan bylaw, by moving new downtown revitalization funds to the base operating budget. The motion passed 4-3, with Mayor Andy Adams and Councillors Claire Moglove and Colleen Evans voting in opposition.
The city’s Downtown Revitalization Tax Exemption Program provides a five-year tax exemptions for a specified area of downtown. After those five years are up, and the property’s owner starts paying annual property taxes, those funds were directed to a reserve to fund downtown capital projects, explained Dennis Brodie, the city’s acting chief financial officer, in an email. About $281,500 will now be directed to operations annually, he said.
In the Dec. 7 city council meeting, Coun. Charlie Cornfield proposed a motion to amend the financial plan to assign this downtown revitalization tax revenue to the base budget, a move he said would be “contentious.”
“My rationale here … I don’t think it’s appropriate to take tax funds and assign it to a specific area in town, when everybody in this town committed to those funds,” said Cornfield. “In order to give the tax break, everyone has to make up the shortfall, and putting it back into base budget provides that ability to cover off the costs associated with it.”
Brodie, in the meeting, said per the previously approved financial plan, the downtown revitalization tax exemption funds were committed towards downtown capital projects, so the plan would need to be adjusted if the motion passed.
Coun. Moglove said she would not support the motion, because the city council had already debated its financial policy.
“And this was one of the major issues that we debated — at the end of that time, council came up with a policy that this downtown revitalization tax funds would go into this reserve to be use for downtown,” said Moglove. “I do not believe that financial planning at the last minute is the time to be re-debating our policies — we had a lot of time to debate those policies.”
Moglove said the move could impact future budgets.
“The only way that this will work without seriously damaging future years, is that every single year, this downtown revitalization funds is used towards the base budget,” she said. “Otherwise, you’re … increasing the structural deficit in the city.”