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15.7 % municipal tax spike proposed in 2023 draft Prince Rupert budget

Lost PILT $, lost Port Tax Cap $, inflation & fiscal revenue/expense changes some reasons for increase
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A slide presented at the Prince Rupert 2023 draft municipal budget presentation on March 22, outlining six external cost drivers contributing to the 15.7 per cent proposed tax increase. (Photo: K-J Millar/The Northern View)

Nightmares may be what Prince Rupert residents went to bed with last night after hearing of a proposed 15.7 per cent tax increase in the draft 2023 municipal budget, presented at the City Council Meeting of the Whole on March 22.

With less than ten members of the public sitting in the gallery, Prince Rupert Mayor Herb Pond and various council members all strongly encouraged city residents to read through the budget documents and presentation that are available on the city’s website to gain an understanding of the why’s and wherefores of such a “significant increase,” and to provide feedback.

“Unlike other levels of government, municipalities are not permitted to operate in a deficit, so each year we must balance the budget. After all other sources of revenue are accounted for, the [anticipated] costs have contributed to a total 15.7 per cent draft increase to the tax rate to make up the difference,” the city stated in a press release issued after the meeting.

The city indicates the increase in taxes is proposed so existing service levels may be maintained and represents an $282 increase to the average homeowner for the coming year.

While new fire station designs, emergency apparatus vehicles, city boilers, library heating systems, heavy equipment vehicles, playground equipment and infrastructure repairs were all requested in the budget, among many other items, a budget presentation slide listed six external cost drivers as part of the reasoning for a tax increase.

Top of the list was revenue loss from reduced PILT Payments (payments in lieu of taxes), Provicinal Tax Cap on port tenants citing a loss of $2 million in potential revenue; fee increase for utilities not shared with all port tenants; the rate of inflation in Prince Rupert is higher than the 6.8 CPI due to its remoteness; contractual increase related to RCMP and net fiscal revenue/expense changes.

“This year’s budget has been significantly driven by external factors, with increasing national inflation impacting contract negotiations with the City’s multiple unions. In addition, devaluation of undeveloped lands held by the Prince Rupert Port Authority has caused significant revenue losses, and the Port Tax Cap places the burden of operational and capital expenditures on all other taxpayers (residents/businesses),” the city stated in a media release after the meeting.

The press release provided a comprehensive breakdown of the tax rate proposed in the draft 2023 budget and stated:

• Labour Contractual/Benefit Increases – 7.1 per cent (overall Consumer Price Index Inflation of 6.8 per cent)

• Revenue loss from reduced Prince Rupert Port Authority Payment in Lieu of Taxes (PILT) and appeal proceeding costs – 4.3 percent

• Contractual Increase related to RCMP – 1.35 per cent

• Staffing requests for under-resourced departments– 1.1 per cent

• Net Fiscal Revenue/Expense changes – 0.55 per cent

• Recreation – increase to pre-pandemic operations – 0.45 per cent

• Legal costs – 0.45 per cent

• Grant increases to Community Enhancement Grants (approved Fall) – 0.4 per cent

Internal factors contributing partially to the proposed tax hike listed operational funding for existing city staff; operation increase for three additional staff positions in under-resourced departments; increase to the annual budget for community enhancement grants; additional anticipated legal expenses and return to pre-pandemic recreation hours.

“Our internal rate impacts are similar to what other communities throughout B.C. and in the North are facing; however, our external impacts have bumped up the total proposed tax rate to be higher than our neighbours.”

The city council will not make a final decision on the proposed budget until public feedback has been received. Residents will have the opportunity to provide their input in two public feedback sessions on April 11 and April 24 at 7 p.m. in Council Chambers at City Hall.

“The public also has the added opportunity to directly interact with and understand the proposed budget via our online budget simulation tool, which is now live via engage.princerupert.ca/budget2023. Written comments can also be directed to finance@princerupert.ca on or before April 24, 2023. All feedback will be submitted to council for consideration as part of their decision making processes,” the media statement reads.

more to come