Tonight, Sackville town council will gather to ask questions and express concerns about the town’s proposed 2021 budget, which was presented last Monday by Treasurer Michael Beal.
The public are also invited to ask questions during a 15-minute question period.
Councillors and the public have had a week to pour over the 59-page document outlining how the town plans to spend just over $11.4 million in revenue in 2021.
The vast majority of that revenue comes from property taxes, explained treasurer Michael Beal in Monday’s budget presentation.
Property taxes account for just over 90% of the town’s revenue.
Even though town staff are recommending no change in the tax rate for the town in 2021, there will be a small increase in property taxes collected, coming from an equally small increase in assessed property values.
This year’s total assessments (or as Beal says, tax base) went up by just 0.71%, about $4.6 million in assessed property values.
In the previous 10 years, the rate of increase has been higher, hovering between 2% and 3.6%––except for 2018 when due to a provincial adjustment gone awry, values decreased.
Beal took some time on Monday to explain the low growth in tax base which affects 90% of the town revenue. But he also spent a considerable amount of time explaining another tiny sliver of funding, one that makes up less than 1% of the town’s coffers: provincial equalization grants.
Equalization grants from the province went up marginally this year, to $81,771. But Treasurer Michael Beal pointed out the steady decline of Sackville’s equalization grant, formerly known as unconditional grant, from the province.
“You can see in 1993–that was my first year with the town–we received $1,000,000 in unconditional grant funding,” explained Beal. “By 2003, ten years later, it was nearly cut in half. Ten years after that in 2013, it was down to almost two thirds. Then by 2015, it was down in the $60,000 to $70,000 range.”
Beal explains that the decrease in provincial funding corresponds to increases in the town’s property tax rate over the same period of time. As provincial funding went down, the municipal tax rate went up, replacing relatively progressive income tax raising with a more regressive system, property taxation.
By increasing the tax rate to match decreases in provincial transfers, the town is now nearly financial independent, in terms of its operational spending.
“We knew that back in 2008, eventually the funding would be gone,” says Beal. “We planned for that. We worked hard to get to a position where our capital revenue was there, and knowing that we’re, in essence, a fully self-sustaining municipality, not relying on the province of New Brunswick for very much funding.”
Despite the fact that equalization makes up a tiny sliver of the town budget, Beal says he brings it up every year. In the coming year or two, it may just end up being a topic for discussion province-wide, as the Higgs government takes on municipal reform.
Many other towns of similar size have much higher equalization grants, says Beal. In his presentation to council, he listed 9 other towns all of similar population sizes, all receiving equalization payments from the province ranging from just under $200,000 to over $1.4 million. One thing left off the slides, however, is the relative size of the assessed property values, or tax base, for the different towns.
In an interview just before he took over for retiring Mayor John Higham, Deputy Mayor Ron Aiken told CHMA he had looked into the rules for calculating equalization, and found they “just don’t make sense.”
Equalization may be one of the topics tackled by the new Minister of Local Government and Local Governance Reform, recently elected MLA for Moncton East, Daniel Allain.
But of course, the outcomes of municipal reform are likely too far out to affect even Sackville’s 2022 budget, much less the 2021 budget up for discussion on tonight.
Council meets tonight at 7pm for questions and concerns about the proposed budget. Anyone can tune in to the stream via Youtube. To participate in the 15 minute question period, residents need to join by Microsoft Teams. Links for both are right here.
Beal is hoping the budget will be approved by council at its November 9 meeting, in time for the province’s November 15th deadline.
For more information check out CHMA’s other Sackville Budget 2021 coverage:
