Taxes going up for homeowners, businesses in new St. John's budget
The city is addressing a projected $13M deficit
The City of St. John's is increasing property and water taxes in its 2022 budget as part of its plan to address a projected $13-million deficit.
The city is not cutting spending on transportation and snow clearing, and Ron Ellsworth, lead councillor for finance, said increasing taxes is necessary to keep the budget balanced while maintaining those services.
"Our plan for 2022 is to maintain levels of service and make small investments that will enhance the services that matter most to you," said Ellsworth.
The residential mill rate will increase by 0.6 mills, to 8.3 mills, while the commercial mill rate will increase by 0.8 mills, to 26.9 mills, which the city says will help address the revenue shortfall. Taxes are calculated by multiplying the assessed value of a property by the mill rate and dividing by $1,000. A property assessed at $250,000 in 2021 paid $1,925 in taxes, and will pay $2,075 in 2022, an increase of $150 a year.
The city expects to earn $3.4 million more from residential property owners, and nearly $4.2 million more from commercial property owners, and collect $1.2 million more from water fees, a tax increase of almost $9 million over 2021.
The city says spending is projected to increase by $10 million in 2022 due to payroll, debt repayment, fleet maintenance costs and other commitments.
Newfoundland and Labrador municipalities are required by provincial law to balance their budgets, and this year the City of St. John's is presenting a balanced budget with spending of $319,603,486, up 2.3 per cent from the 2021 budget of $312,526,525.
St. John's city council voted unanimously in favour of the budget, though some expressed reservations about certain aspects, particularly the increased taxes.
"None of us are excited about this budget, but it's the best budget as a team that we could develop and bring forward," Ellsworth said.
Addressing the deficit
Due to an overall decline in property values due to reassessments, the city says not everyone's tax bill will go up: 70 per cent of residential property owners will see an increase, while 30 per cent of residential property owners will see their taxes stay the same or go down. Nineteen per cent of residential property owners will see their taxes increase by more than $120 a year.
The city also says just over half, or 55 per cent, of commercial property owners will see their taxes go up, while taxes for the rest will stay the same or go down.
The water tax will go up by $5, from $620 in 2021 to $625 in 2022; the city expects to make about $500,000 in revenue from this increase, though it says that money will go toward maintaining water services.
The city says 1,100 individuals visited the city's budget public engagement page but just 76 participated in online discussions.
St. John's expects to earn 68.2 per cent of its revenue in 2022 from taxation.
Additional spending
Spending is going up in some areas, like snow clearing, transportation and maintenance costs; however, Ellsworth noted that most additional spending will not mean overly significant changes in service levels.
"While it would not be responsible to bring forward an austerity budget … it would also not be fiscally responsible to significantly enhance the level of service we provide," he said while presenting the budget.
The city will spend $510,000 to add a third sidewalk snow-clearing shift. Snow clearing, particularly on sidewalks, is a hot-button issue for the city, and residents protested for better snow-clearing on sidewalks in 2020.
During the council meeting, Coun. Maggie Burton noted that while the third snow-clearing shift will be in operation this winter, it will not be entirely functional until the city procures more equipment for that shift.
St. John's will spend $19 million on transportation in 2022, including on a new service that the city says will see increased frequency on key Metrobus routes. Paratransit costs are also up in 2022 due to higher ridership.
Burton said she would've liked to see more substantial increases in sidewalk snow clearing and transportation spending, but it was a step in the right direction.
The downtown pedestrian mall is slated to return in 2022, with additions for the province's Come Home Year 2022 celebrations.
The city expects to spend $445,000 on preparations for the 2025 Canada Games, though it said the games are expected to generate over $77 million in economic impacts.
Staffing is up by 6.27 positions, some of which will cover the new sidewalk snow-clearing shift. The city is also adding an internal auditor position to help with "best practices for good corporate governance" and new marketing position to "support economic development opportunities." The city has about 1,100 full time-equivalent positions.
The city says it's also spending more on maintenance due to higher prices in equipment and parts.
Though the city made small cuts to some areas, such as a $280,000 decrease in administrative spending, the 2022 budget did not make substantial service cuts.
During Monday's meeting, Coun. Jamie Korab said it would be difficult for council to make additional cuts in spending without affecting core services.
"There isn't much meat left on the bone when you go through it all," he said.