District of Houston councillors are now pondering a tax increase of 2.8 per cent, a figure that came out of a debate when they met April 2.
That would be a drop from a previously contemplated 4 per cent hike which was last year’s increase.
The 2.8 per cent increase was advocated for by councillor Tom Euverman and continued his consistent theme from past meetings that the council hold the line on property tax increases.
“I would like to keep it to 2.8 per cent — 2.9 per cent,” he said in citing that’s the expected increase in inflation this year.
A one per cent increase equates to roughly $50,000, meaning the hike would come in at around $150,000.
Euverman also pointed out there is $55,000 in taxes expected from new construction, an amount that could also buffer a tax increase.
But reducing the property tax increase from four per cent would also mean spending cuts from the operating budget as now proposed, indicated finance director Jennifer Larson.
“We would need direction from council as to where you would like to see those cuts made,” she said.
Euverman said one unknown factor in setting a property tax increase is the amount of money coming to the District of Houston from a $250 million provincial government grant to be spread out among northwestern local governments over the next five years.
Councillor Jonathan van Barneveld joined in with Euverman, suggesting that cutting the paving budget this year could result in trimming any tax increase and then restoring the paving budget when the District does get its share of the provincial grant.
But Larson pointed out that items such as paving are part of the capital spending budget which is separate from the operating budget and that it is the operating budget which is financed by property taxes.
She did suggest, however, that council could reduce the amount of money it would otherwise place in its reserves this year for specific purposes.
Larson listed the $100,000 tentatively to be sent to the fire department reserve, $25,000 for playground improvements as examples.
“That would certainly result in more of a reduction in taxation and from your suggestion those things could be funded from [the provincial grant] money but I leave to council for direction,” she said.
As it is, the $100,000 for the fire department reserve would be added to the amount set aside each year to save enough so that when a replacement fire truck is needed, the money needed is on hand.
Larson also said that a federal gas tax rebate of approximately $200,000 is expected but has yet to be accounted for in budget planning.
Councillor Troy Reitsma joined in the debate, saying he was leery about reducing the amount of money going into reserves, saying that the practice can result in one day having to increase taxes significantly to make up for shortfalls.
“One thing I would like to see is that whatever rate we decide on, it’s that the increase is for everybody and not just the residential rate,” he said.
“So if we decide on a three per cent rate, it needs to be three per cent for heavy industry, three per cent for light industry … everybody needs to be the same,” Reitsma added.
Council was to give second reading of the District’s five-year financial plan bylaw, a document which includes the 2024 budget, on April 2 but held off pending a resolution to a property tax increase.
Based on provincial legislation, council must pass its five-year financial plan bylaw by May 15.