Saint John faces tax hike, service cuts

Saint John will have to raise taxes or slash services if it does not soon hear from the provincial government about whether it will help address the city's pension crisis.

Saint John councillors have to find roughly $5 million to bring the employee pension fund, which was hard hit by the recession, back up to the level required by provincial legislation in the next fiscal year.

City workers face wage freezes and the watering down of their pension benefits as the city tries to tackle the fund's $129-million deficit.

The New Brunswick government must approve a change to allow the city to implement the proposed reforms.

However, Premier David Alward said in an interview on Thursday that he couldn't guarantee he'd have a decision before the city's 2011 budget vote.

'We can't come anywhere near it unless we basically burn the city down.' — Coun. Bill Farren

"I haven't got an answer on that," Alward said on Thursday.

"We have said that we will review the future of pension plans in New Brunswick."

Saint John's pension deficit is increasing by about $750,000 a month. In November, the city said it was at risk of having assets seized if it does not make an overdue $5-million payment on its pension fund.

Councillors concerned

The Alward government's inability to confirm whether it will approve the city's pension reform plan before the crucial budget vote in late January has several councillors worried.

"I guess I have a real concern after hearing the interview [Thursday] morning whether any of the reforms will move forward in time for next year's budget," said. Coun. Gary Sullivan said.

If the provincial government does not agree to the city's request, property owners in the city face a 13-cent hike in property taxes. That would be an extra $130 on a home assessed at $100,000.

Or, an alternate plan may include a smaller tax hike combined with deep cuts to city services

Coun. Bill Farren said there's no way the city could find the necessary money to address the pension problems on its own.

"We can't come anywhere near it unless we basically burn the city down," Farren said.

Sullivan said the council cannot afford to wait a long time for the Progressive Conservative government to make a decision.

"It is critical that the government understand that this isn't something that we need a couple of years of study on," Sullivan said.

"We have done our homework in the city and are in need of their help to move it forward."