Property tax scandal bills pile up as N.B. sets aside $2.6M to compensate municipalities

The Brian Gallant government is setting aside an estimated $2.6 million to partially compensate New Brunswick municipalities it expects to suffer a net revenue decline next year because of the provincewide property assessment freeze it plans to implement.

"We will work with local governments that will see a decrease in revenue … due to the freeze,"  Local Government Minister Serge Rousselle told reporters in Fredericton on Tuesday morning.

"However, this will not apply to local governments whose revenues will increase from a growing tax base."

All 107 New Brunswick municipalities will be affected by the assessment freeze, but Rousselle said most should be able to grow revenues since property sales and properties undergoing new construction are exempt from the freeze.

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But current estimates are that 48 municipalities will experience negative growth in tax revenue because of the freeze and the province is prepared to spend what is needed to eliminate those losses, which he said are estimated to be $2.6 million.

"These are only projections and we will only know by the end of October," said Rousselle.

Several municipalities and municipal associations expressed concern with plans for the assessment freeze following its announcement in June because it will apply only to increases and not decreases.

This really hasn't changed anything for me.- Don Darling, Saint John mayor

That will have significant impacts on communities where property values are adjusted constantly.

On streets like Saint John's Westminster Court this year, overall tax revenues to the city barely changed, even though 18 homes on it had an assessment decrease.

That's because 13 other homes had assessment increases to balance out those losses.

Next year, only the decreases will count.

Saint John Mayor Don Darling is not hopeful the city will get any of the money announced by the province, even though preliminary estimates are it will lose about $600,000 in tax revenues from assessment reductions next year.

Revenue increases from construction projects such as the new Irving Oil headquarters are expected to be just enough to break even and provincial compensation will only be available to communities with shrinking tax revenues.

"This really hasn't changed anything for me," said Darling.

'Trying to buy silence'

The freeze was announced in response to the continuing controversy over the provincial government's mishandling of property assessments this year.

A new assessment system generated thousands of inflated  property tax bills, and Service New Brunswick managers were caught making up renovation amounts on some homes to justify some of the larger increases.

A record 18,000 property owners challenged their assessments and the province is still identifying and fixing mistakes.

Opposition Leader Blaine Higgs criticized  the plan to partially compensate municipalities that will be harmed by the freeze.

"Now they're trying to buy silence," he said. "If they can go around the province and create independent deals, then they will buy silence and they'll spend whatever it takes to do that."