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North Cowichanians face average $41 tax hike this year
North Cowichanians face an average tax hike of $41 this year, council decided after Wednesday’s long budget debate.
That boost is based on a 3.05 % tax increase on the average North Cowichan home worth $325,691.
Final budget approval was expected by around May.
Last year’s tax rise was 3.7% on the average home, noted CAO Dave Devana.
This year’s hike could have been lower if council hadn’t followed plans to fund a raft of community programs, Devana noted.
He cited $30,000 for economic development, $20,000 to relocate Chemainus’ Neighbourhood House , $21,000 for a reserve to replace Cowichan Aquatic Centre equipment, $18,000 for a seniors fitness at Mt. Prevost school, and other programs.
“Had council not approved the supplementals — things we were intending last year — (average ‘14 tax increase) would have been $29,” said Devana.
Council backed staff’s recommendation to include those community program costs in its 2014-2018 financial plan — and basically lift estimated 2014 net tax hikes from 2.27% to 3.05%.
Councillor John Koury’s earlier motion — that failed to find a seconder Wednesday — was to cap the 2014 budget at a 1% increase, then direct staff to draft a 2014-18 plan to include the proposed capital shift and supplementary stuff — without interrupting services. Koury touted using municipal reserves to keep taxes low, and make up differences with municipal growth.
“This (proposed ‘14 budget) is an ultra-conservative approach; we’re squirreling money away for every little thing. We always have a healthy cash balance in our account,” said the frustrated councillor.
He was warned by Mayor Jon Lefebure to follow council’s protocols of order. Koury persisted.
“Let’s start leveraging our surpluses, and use money in the bank to do things. We haven’t spent enough time figuring out how to stimulate our economy.”
But Devana and treasurer Mark Frame utilized charts showing how using reserves to drop taxes dug budget holes in recent years — forcing big tax hikes to balance shortfalls.
"The only responsible way is to cut programs (not subsidize with reserves)," explained Devana.
Counsellors Kate Marsh, Jennifer Woike, and Ruth Hartmann agreed.
"I don't agree with the principle of short-term gain," said Marsh.
"I make decisions based on what's a good model, and this (recommended budget) is a good business model," said business-owner Woike.
"If we reduce taxes to 1% now, it'll mean a 5% increase in 2015," said Hartmann.
Council's average tax hike, from 2004 to 2011, was 5.4%. This year's revenue growth of 1.26% will shave a 4.31 % tax hike to the 3.05%. Comparatively, 2007 saw 1.01% revenue growth, ending in a 9.06% tax hit.
Devana's balanced method will see steady drops, spelling a 2.47% jump expected in 2018. He backed a planned regional community profile toward luring more businesses and deepening Cowichan's tax pool.
Lefebure cited council's revitalization plan targeting Crofton, downtown Chemainus, and the University Village with tax breaks, "rather than using surpluses and borrowing or raising taxes."