Tax hike coming for St. John's residents

St. John's city council is expected to reduce the mil rate for residential taxes Monday, but it doesn't mean that homeowners will see a decrease in what they owe.

Councillors are expected to reduce the tax rate from 11 mils to about 10 mils when the city finalizes its 2010 budget, CBC News was told. 

However residents recently saw the value of their homes increase by an average of 20 per cent when the latest tax assessment notices were sent out. 

Ward 4 Coun. Debbie Hanlon said during the municipal election in September a lot of candidates were promising to fight for a big reduction in the mil rate to counter the increased assessments.

"We were out on the election campaign trail when the assessments went out ... we were getting hit with this and there were a lot of new people on the campaign trail, so they were going out and making these promises that 'We got to drop, we got to drop.'" she said.

"But how can you make such promises when you don't know the cost of running the city?"

Hanlon said every time the mil rate drops by one per cent, city hall loses $12 million.

"So, if we drop $12 million," Hanlon told CBC. "Then that's $12 million taken away from the projected money to do the projects that we want to do."

Hanlon said councillors will make the final decision at Monday evening's regular council meeting.  

"What's going to happen tonight? I'd say it's going to be a lively debate," she said. 

The city's 2010 budget is expected to come in at more than $190 million.