'Not sustainable': Saint John gets budget approval, but it comes with a warning

Saint John council approved its operating budget for 2019 with stern warnings the municipality could soon be in deep financial trouble.

The $160-million budget holds the tax rate at $1.78 — where it's been for several years.

Under the tax rate a home assessed at $200,000 would carry a tax bill of $3,750 next year.

But councillors heard that without an emergency funding package approved last year by the provincial government, the city's tax rate would have to increase more than ten cents to maintain service and employment levels where they are now.

"This budget is not sustainable," said Kevin Fudge, the city's finance commissioner. "[The] status quo business model is not an option."

• Saint John's proposed $160M budget inspires confidence and jitters 
• 'It's very upsetting': Saint John officials disappointed with new NBM in jeopardy 
• New year to bring in service cuts as Saint John's budget shrinks

Fudge said the city has to rein in rising salary and benefit costs and get the province to agree to some kind of reform of the property tax system.

The special funding package from the province amounts to $7.1 million in 2019, but runs out at the end of 2020.

The city assessment base grew by one per cent in 2018, but has averaged less than a per cent annually over several years — moving from the centre with the highest assessment base in the province in the year 2000 to third place today. That's 17 per cent behind Moncton and five per cent behind Fredericton.

The city has been asking the province for municipal tax reform, including removal of partial tax exemptions for major industries like the Irving Oil refinery.

According to Mayor Don Darling, the city has been assured by the Blaine Higgs government that some reforms are on the way.

Meetings with government 

Councillors met privately Monday with two local members of Higgs's cabinet, including Social Development Minister Dorothy Shephard and Post-Secondary Education, Training and Labour Minister Trevor Holder, along with PC MLA, Glen Savoie, who represents Saint John East.

"Excellent discussion today, great first meeting," Darling said afterward. "We talked about a range of items including municipal reform, which they were very supportive of."

The $160-million 2019 budget is $4.9 million higher than this year's budget.

It allocates $24.6 million for fire services and $26 million for police.

Meanwhile, public transit will receive $7.9 million.

The city has a permanent staff of 627 people and no major cuts to services have been proposed.