Tax rate increase considerations as operating budget projects deficit
Tuesday, Feb 16, 2016 06:00 am
A tax rate increase could be in store for residents.
At its Feb. 8 meeting, administration briefed council on its 2016 initial operating budget, which projects a $227,731 deficit.
One possibility could be a 1-1.5 per cent increase from the 2012 tax rate. The $26.6-million budget is based on the 2012 municipal tax rate, the last time there was a permanent increase.
If a 1.5 per cent tax increase is approved, that would translate into a $22 tax increase for the average Olds home, according to chief administrative officer Norm McInnis.
In 2014, the rate was raised three per cent to recover snow removal reserves. It was also raised by 2.25 per cent in 2015 for the town's contribution to the splash park construction.
In McInnis's view, it's about time for a permanent increase.
"I think so. It's really unfortunate that this 'about time' comes right at the same time when the economy is taking a downturn, so there's some difficulty with that and pulling the trigger at this time. So we'll bring back the draft operating budget for first reading and we'll see if it sticks or not," McInnis said.
Using the current assessment estimates, each one per cent rate increase would raise $81,500, according to council's briefing notes.
During the meeting however, Coun. Harvey Walsh suggested that administration find $125,000 in efficiencies for the budget.
Council passed a unanimous motion asking administration to present its findings at the next regular meeting.
"We know the economy isn't doing well right now … We know expenses are going up for homeowners … we know utilities are going up," Walsh said.
"I think they can find one or two per cent efficiencies. It's not a huge amount in this size of budget. It just gives the homeowner a little bit of a break on that side of things. That's my thinking."
McInnis said based on last year's assessment numbers, a 1.5 to two per cent increase would cover the balance of the deficit if administration finds the cuts.