Almost no appetite for zero percent tax hike among Saugeen Shores politicians

Article Sidebar

Article content

A small municipal tax increase allowing more money to be socked away in the Town’s Legacy Fund is acceptable to eight Town of Saugeen Shores councillors whose rejection of a tax freeze proposed by Mayor Luke Charbonneau him in what he called a “deep minority” on the issue.

The Legacy Reserve Fund, set up in 2019 to help save for future projects including an aquatic centre and the Lamont Sports Park, calls for an annual contribution, funded by taxes, of at least $500,000.

Town CFO/Treasurer Dan Waechter offered funding options to councillors at the Jan. 11 committee of the whole meeting because they were “not able to fit” a requested $500,000 Fund contribution increase this year in the draft budget, and meet the zero percent municipal tax rate increase target.

The budgeted Legacy Fund contribution this year is $2.1 million.

Debating the contribution options offered by staff Deputy Mayor Don Matheson called for an increase between 2 to 3 percent to continue Council’s commitment to build up the Legacy Fund, saying he does not think they are in a “hold steady” situation, despite COVID-19.

Advertisement

Story continues below
This advertisement has not loaded yet, but your article continues below.

Article content continued

“I do believe that it’s important to keep our contributions to the Legacy Fund,” Matheson said.

“I do not believe in zero percent increase because although we may save now, we will have to pay more later and I do not believe in doing that.”

Those comments were echoed, first by Coun. Kristan Shrider, who noted the Town will have to “go it alone” to pay for big recreational and cultural projects as government funding dries up.

“I think we need to plan strategically for our future and I think that it would be in our best interest to see an increase…” she said, adding she could support an increase “in and around 2.5 percent.”

Coun. Dave Myette agreed with his colleague’s opposition to the zero percent municipal tax increase, and said the community has “weathered the COVID situation relatively well” so far, and if they lose sight of the contribution they will fall behind.

“I’m comfortable with a 2 percent increase – that’s where my head’s at – and that’s where I’d like to see it come back,’ Myette said.

Coun. Cheryl Grace said the more they can afford to put into the Legacy Fund, the better, noting an additional $175,000 contribution equals a one per cent tax increase.
“That would result in an extra $1.7 million by 2030 – that’s 10 times payback on that investment,” Grace said, adding for the average household the one percent municipal tax rate increase equates to a $21.25 tax increase. It would add $7.63 in property tax – to $22.09 – for an average downtown business.

Advertisement

Story continues below
This advertisement has not loaded yet, but your article continues below.

Article content continued

Coun. John Rich said if they don’t contribute at the planned pace – $500,000 annually – they will find themselves falling behind in the ability to pay for large projects, which they must pay for themselves as government funding dries up.

“If we reduce the amount of (Legacy Fund) contribution now, that will force us to build these projects later, which in turn will end up costing us more money,” Rich said, adding he’d support a 3 percent tax increase to continue to build the Legacy Fund and save money down the road.

Vice Deputy Mayor Mike Myatt said a zero percent tax increase might be popular with the some of community, but it’s not the right thing to do, and he listed millions of dollars of projects that could be funded through the Fund.

“The one percent (increase) – $175,000 (or) $2 million over 20 years – you never get that back if you go with zero and I think we need to be continuing to contribute to the Legacy Fund,” Myatt said asking staff to report back on what a range of increases, with a minimum of one percent, would look like in dollar amounts.

The best time to continue to prepare for the future is now, according to Coun. Jami Smith.

“My greatest concern with a zero budget is that we are far from over …and the impact of the pandemic might not be any better next year…” Smith said, suggesting they “punt” the tax break suggestion further down the line.

Coun. Matt Carr said he’d “obviously love” to see a zero percent tax increase this year, but they need to look further down the road at projects.

Advertisement

Story continues below
This advertisement has not loaded yet, but your article continues below.

Article content continued

Carr said he might support a one or two percent tax increase, and it is more financially responsible to face a an increase of “$20 now rather than $60 later.”

Mayor Luke Charbonneau called for the tax freeze on the municipal part of the tax bill during a “once in a century” and extraordinary economic downtown.

He said current Legacy Fund contributions are “plenty” to fund council’s goals, and they don’t need more taxpayer money this year to subsidize spending.

He suggested a fair way to increase the tax rate is to match it with the level of inflation – hovering near 1.5 percent.

Staff said a one percent lower-tier increase would result in an additional $175,000 contribution to the Legacy Fund, and a 2 percent increase to the blended tax rate would result in an additional $350,000 contribution.

Staff is expected to present a final budget report to council Jan. 25.