Town treasurer Michael Beal laid out the proposed 2024 operating budget for Tantramar at a special meeting on Wednesday. Beal is recommending five cent increases in tax rates for the three former local service districts (LSDs) of Sackville, Dorchester, and Point de Bute, and small decreases in the rates for the former town of Sackville and village of Dorchester. The former town rate would go down by .7 cents, and the village rate would go down by 2 cents.
Recommended tax rates for Tantramar sub-units (updated as of Nov 6, 2023)
- Former town of Sackville: 1.5389
- Former village of Dorchester: 1.5415
- Former Sackville LSD: 0.5625 (0.974 including provincial tax)
- Former Point de Bute LSD: 0.7637 (1.1752 including provincial tax)
- Former Dorchester LSD: 0.6411 (1.0526 including provincial tax)
The tax rate is only part of the equation that determines how much tax property owners pay. That amount is calculated by multiplying the tax rate with the assessed value of a property, and assessments in Tantramar, like the rest of the province, have increased across the board. According to figures published by the province, property values went up by 9.2% on average across Tantramar between 2023 and 2024. The combined tax base for the amalgamated municipality (the total of property values taxable by the town) topped $1 billion this year.
This is the first Tantramar budget created by staff, and to be approve by council. The 2023 budget was created by a provincial consultant hired to oversee the amalgamation process. Still, there are a number of items not under the control of the town, particularly when it comes to setting tax rates.
Provincial legislation requires that increases to tax rates in former LSDs not exceed five cents each year. According to Beal’s calculations, the rate for the former Sackville LSD should have gone up more than 35 cents this year, to cover shared and local services. For the Dorchester LSD it would have had to go up over 27 cents. For Point de Bute, where tax rates were already higher than the other two LSDs, the rate would need to go up just shy of 7 cents, to meet budget requirements.
But provincial legislation governing the amalgamation of municipalities requires a minimum five year phase in period to bring tax rate levels in line. And recent additional legislation also capped any single year increase at five cents, unless a justification could be provided to the province.
Beal outlined two options to council on Wednesday, but recommended going with the five cent option, which would reduce the immediate burden on Sackville and Dorchester LSDs, but see the Point de Bute LSD face a more rapid increase. If the town chose to ask the province to waive the five cent rule, rates would go up almost 9 cents in the Sackville LSD, and almost 7 cents in the Dorchester LSD.
“Given the tax rate differential legislation,” Beal told council, “we feel using that is the fair and equitable way for the local service districts.” Point de Bute residents are the main losers under this scenario, because they would see an immediate five cent increase, instead of a phase in of just 1.69 cents. This option also means a smaller reduction in taxes for both the former town of Sackville and village of Dorchester. (Sackville would go down .7 cents instead of 1.14, and Dorchester would go down 2 cents instead of 2.44.)
From five tax rates to two
Tantramar has five different tax rates corresponding to five different pre-amalgamation jurisdictions, now known as sub-units. The province has given municipalities the task of combining sub-units as soon as possible, in order to simplify budgeting and operations. While it could take up to 7 years to get the former LSD rates in line with the town budget and each other, Beal is recommending the village and town rates be combined for 2025, which means a council decision on the issue this coming year.
“The deadline for that would be June 2024 to get that into Service New Brunswick,” Beal told council. “The two tax rates came to within a quarter of a cent of each other. And what is that for? Transportation services.”
Whereas streets and roads in LSDs are serviced by the province, Tantramar public works handle both the town of Sackville and village of Dorchester. “When we start clearing snow in Dorchester, it really isn’t going to matter which operator goes over, whether it’s a Sackville operator or Dorchester operator,” explained Beal. “When we need to respond to a water break and have to send a whole crew over, it’s not going to matter who who’s going.”
The tax rates and service levels are close enough to merge, argued Beal, “so that we’re not having to account for percentage based accounting for Sackville and Dorchester.”
The merging of the two would mean moving to four sub-units instead of five, “with future plans to get to two entities,” said Beal, “a local service district entity and a former incorporated entity.”
Beal will continue budget presentations at another special meeting on Monday, this time looking at the town’s proposed capital budget. Final decisions on the 2024 budget are scheduled for November 15.
