North Saanich has cut the proposed property tax increase in half to dampen the economic effects of the COVID-19 pandemic, but several councillors said the move is about “optics” rather than economics.
Councillors approved staff’s recommendation to raise property tax revenues by 1.44 per cent — half of the amount they had earlier approved. The new figure means that residential rates are rising 1.65 per cent, while business rates are increasing 0.95 per cent. For residential properties, this will reduce the increase to an average of $21 from $42. For business properties, this will reduce the tax increase to an average of $175.
The change came after developments have since significantly changed the landscape. They include the continuing economic fallout of the COVID-19 pandemic, new announcements by the provincial government to help businesses, and changes to tax rates in surrounding communities, including Sidney. That community has approved a zero per cent increase in general property taxes with a 10 per cent cut for commercial and light industrial properties and the public recently heard calls for other communities including North Saanich to match Sidney’s approach.
Mayor Geoff Orr said following discussions with chief administrative officer Tim Tanton about revisiting tax increases, a straw poll among councillors found a majority of council in favour.
Couns. Jack McClintock, Patricia Pearson and Celia Stock joined Orr in favour of the reduction, with Couns. Heather Gartshore, Brett Smyth and Murray Weisenberger opposed.
The approved cut represented the second of three options before councillors. The first option called on councillors to maintain the status quo, while the third option called for zero per cent tax increase for all property classes.
Weisenberger favoured the original budget in questioning the rationale behind the move.
“Why do we find it necessary to reduce the tax rate here?” asked Weisenberger. “If the answer to that is optics, then I am definitely out on optics. The inevitable end of optics and dealing with a thing on optics is Donald Trump.”
He also questioned the fairness of the tax. “It is a general reduction and everybody gets it, whether you are in hardship or not,” he said. “We are the third or fourth most wealthy municipality in B.C. I’m probably at the poorer end of people who live in this fine municipality and I can manage to pay my taxes. We all have to pay for the services we get.”
If North Saanich found it necessary to cut taxes, it should be more specific, he said.
Garthshore agreed with Weisenberger’s arguments and also questioned the process. She said she was not aware of any genuine public concerns about taxes, and any correspondence in favour of tax cuts was purely on the basis of optics.
“When I ran in 2014 and 2018, I ran to serve my community, not make decisions that make me look good or encourage my council colleagues to make decisions that make us look good,” she said. “I ran to make decisions that are in the best interest of our community.”
Dropping the proposed increase from about $42 per average residential property to $21 is “so minuscule,” it won’t make any difference, she said.
Both Gartshore and Weisenberger later clarified their respective comments by saying that they were not personally accusing Stock — who moved the motion — of acting because of optics.
McClintock called the budget cut “prudent” during the current crisis and added later that the move is not about optics in noting that councillors earlier gave residents a break on helping to fund water infrastructure. Why did that deferral not count as optics, he asked. “It’s a matter of helping the public,” he said.
Orr agreed. “If we have done nothing else, at least we have shown the public that we do take this matter seriously,” he said.
“To move it up or move it down, it isn’t necessarily going to make a enormous difference,” he said later, adding with the uncertain future, North Saanich is acting now with the best available information.
“We have sharpened our pencils a little bit,” he said. “It may not be a lot, but every little bit does count and it doesn’t break the bank.”
Tthe approved option will see the municipality reduce its revenue increase by $158,000. The third option would have seen North Saanich forego $316,000 in additional revenue. Staff also identified some $71,000 in potential cuts with the remaining funds ($87,000) said to come from unallocated surplus.
While shares of the surplus are already going towards special projects in 2020 ($325,000) and the contingency reserve to cover COVID-19 associated expenses ($200,000), staff expects the surplus balance be well above the minimum level of general surplus by the end of the year.
Staff’s report also spells out familiar dilemmas facing all communities dealing with the economic effects of COVID-19.
But “the challenge for local governments is that nearly all of their revenue is collected through property taxes and utility fees and they do not have the same ability as senior levels of government to provide assistance,” it reads. In other words, local governments have limited options when it comes to providing relief.
Any relief now, in the absence of other significant revenue sources, will likely lead to pain in the future. “The revenue reductions associated with Option 2 could result in a 4.97 [per cent] tax increase in 2021, and Option 3 could result in a 6.47 [per cent] tax increase in 2021,” it reads.
Under the current budget, the future revenue increase would be what the report calls a “modest” increase of 3.53 per cent.
This said, all of these scenarios do not include any future expenditure cuts.
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