City council votes against spending surplus money to keep tax bill down.
After much debate, Halifax Regional Council voted against using the $20 million surplus reserve to keep residential and commercial tax rates down. The rate will go to a final vote at council at 2.3 percent, meaning a $43.83 increase
on the average home tax bill of $1,979.
Mayor Mike Savage recommended taking $900,000 from last year’s budget surplus to lower the proposed average tax bill rate from 2.3 percent to 2.1 percent but his amendment was defeated.
“It’s not something you would do very often,” Savage says. “It’s not something you would rely on doing. But I think it’s a statement that we recognize that, for a lot of people, taxes are difficult.” The decrease would shave about two dollars off the average tax bill.
The amendment supported by Councillor Tim Outhit, who compared the 2.1 percent increase to council paying a dividend to the residents who helped achieve the surplus by buying and selling homes last year.
“This is a proposal to put less than 10 percent of the money that came from our residents back to our residents.”
Not everyone agreed.
“We are not a business,” Councillor Sam Austin says, referring to Outhit’s dividend comment. “Our concerns are fundamentally different.”
Austin recently likened the issue to buying groceries with savings–eventually savings run out, but groceries are a constant.
By using part or all of the surplus to lessen taxes, Austin says council might struggle to pay for long-term items in the parking lot list of upcoming expenditures including a $600,000 improvement to transit and Fall River’s $363,000 fire service expansion.
“To me folks, we’re setting ourselves up potentially for more misery next year,” says Austin.
CAO Jacques Dubé agreed with Austin, arguing that using reserve funds to pay for a reoccurring expenditure like yearly taxes is risky business.
Dubé says when you start taking money out of reserves to pay for day to day it's like "taking money from your visa card or your American express card to fund ongoing operations, at some point you’re going to be short.”
After back and forth from councillors Richard Zurawski, Bill Karsten and Matt Whitman, Council reached a stalemate. Eight voted for and eight voted against the amendment, meaning it didn’t pass.
Council then voted on the original motion of a 2.3 percent increase based on their hashing out of the parking lot list which passed and will go to a final vote for council approval next month.