Council to vote on tax plan

Here's a look out the three options and what they mean for businesses and residences in the city.

Click on the links to view a spreadsheet with more details.

The first option is to increase the city’s municipal mill rate by 6.83 per cent to 20.43 from 19.13.

The increased mill rate will mean both residences and businesses would see an increase in the amount of municipal tax dollars of about 6.46 per cent increase.

This is the city's simplest solution that will raise the necessary money, but members of the public and councillors have expressed their distaste for such a large increase.

Simple increase and vacant lot taxation

For the second situation is similar but with a smaller increase because the city would tax vacant lots and generate about $175,000 in revenue.

As a result, the city would only have to increase the mill rate by 6.03 per cent to 20.28 from 19.13.

In this situation, residences and businesses of all sizes would expect to pay an addition 5.71 per cent in municipal taxes.

Mill rate increase with a minimum tax

The final scenario is to increase the mill rate by 3.25 per cent to 19.75 from 19.13. This is the situation the city's budget committee passed in principle.

The underlying principle is that, all homes would pay a flat tax of $100 and businesses would pay a flat tax between $300 and $3,000 depending on its size.

Ultimately, all scenarios would raise the same amount of money but would effect different sized homes and businesses in different amount.

Properties with less value would see a larger increase as the flat tax would be a high percentage of the taxes they would pay.

For instance, a house valued at $50,000 would see an increase of almost 20 per cent, while a house valued at $200,000 would see a 7.28 per cent increase.

In additional to the minimum tax, this system also means the highest increase for all houses, regardless of size.

That's because the city is trying to raise $1 million each year for the next several years in order to have money to pay for infrastructure in the coming years, specifically the Diefenbaker Bridge.

Base tax and the effects on businesses

For businesses, the effects are even greater, since the lowest increase even the smallest business would pay $300.

For a small business valued at $50,000, the increase would be almost 25 per cent.

The sliding scale the city wants to introduce does mitigate the impact but it is still significantly lessoned for larger businesses since they can be valued in the millions of dollars.

Education taxes

The province also announced it would change its education tax mill rate for residents and businesses.

For all residential properties of all values in all the above mentioned tax scenarios, it means a savings of about 5.6 per cent on the education portion of taxes.

Businesses however will not equally change though. The province said it would only reduce the education taxes taxes for businesses valued between $500,000 and $5 million.

This means that only mid-sized businesses benefit from the reduction.

The decision

During budget deliberations last month, a majority of councillors voted in favour of the minimum tax and mill rate increase combination.

Tonight is the first time they'll be pubically given the above options. Their vote will determine how the proposed tax rate will effect your property.

paNOW will provide live updates from today's council meeting on Twitter @princealbertnow. We'll also get councillors' thoughts after the meeting.

adesouza@panow.com

by Andrew de Souza

Council to vote on tax plan

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