A new Tantramar council spent just over two hours on Monday afternoon reviewing the details of the municipality’s $15.5 million operating budget for 2023.
CAO Jennifer Borne pointed out that it was unusual for such a presentation to happen in mid-February, just over 6 weeks into the fiscal year. “I would say that’s probably a career first for all of us,” said Borne in her opening remarks. “We’re checking off a lot of firsts with Tantramar, but that’s kind of an interesting first.”
The province’s approved budget for Tantramar was handed over to town staff on January 6, with just basic line numbers providing very little detail or specifics. Borne and acting treasurer Michael Beal have spent the last number of weeks going through the budget line by line to make sure all departments are covered.
About $1.5 million of the new town’s budget is raised through rents, grants, and fees charged for services, but taxes provide the lion’s share of the budget, approximately $14 million. How that money is raised—and how it’s spent—is more complicated than ever this year, thanks to amalgamation.
There are five former entities in Tantramar, and each had their own tax rate in 2022. Those five entities will remain on the books as sub-units in the new municipal budget, with five separate tax rates. Two of those rates will remain almost flat, but some—those in the local service districts—will start to climb.
The rate is of course only one part of the equation, and because assessments have gone up on average everywhere except the Dorchester LSD, most residents in all parts of Tantramar will pay significantly more in taxes even without a tax rate hike.
Data from 2022 Local Government Statistics for New Brunswick.
Why are LSD rates going up?
Before amalgamation LSD tax rates were set by the province, without necessarily accounting for the actual cost of the local services provided. Now that the municipality of Tantramar is responsible for local services (such as police and garbage collection) as well as new shared services, the calculations of those costs, and the taxes required to cover them, are more important. And while the province has approved rate hikes this year from local service districts, the bad news gets worse over the next few years, with continued rate hikes that will gradually bring LSD tax rates in line to cover actual costs.
According to Tantramar’s acting treasurer Michael Beal, a straight up distribution of the costs of shared and local services for the town, village, and local service districts would mean even higher tax hikes for LSDs than what the province has put forward for 2023. According to Beal’s calculations, the rates for LSDs should be around 79 cents per 100$ of assessment, not including the province’s transportation rate, in order to properly cover the shared and local services as outlined by the province.
For the Sackville LSD, which had the lowest tax rate in 2022, that would mean a 35 cent rise in tax rate, about 80% more than they paid last year. For the Point de Bute LSD, the shock wouldn’t be as bad, with just a 10 cent raise required. But neither LSD will see a rise that high this year, because the province has required a five year phase in to meet the new cost demands.
But all these calculations rely on a basic agreement on what exactly are shared services, and what are local services. For 2023, that has been decided by the province, but in future, those definitions could change and Tantramar council could make adjustments to how costs are shared.
“Interesting conversations will be held in this room going forward,” said Borne on Monday, “of cost-shared services, local versus cost-sharing, and inside outside rates.”
What is shared, and what is not?
Transportation is perhaps the biggest expense that is NOT shared in the new budget. That’s primarily because the province will continue to look after roads in the former local service districts, and will charge its own property tax rate, about 41 cents per $100 of assessment, to cover that cost. Michael Beal says it’s just as well the province will hold on to transportation responsibilities, because that 41 cents is not enough to cover the actual cost of that service if the municipality were to take it over. “That is one of the main reasons why Sackville and Dorchester have higher tax rates,” says Beal, “because our transportation costs are 100% in our budget, 100% to the taxpayer.”
Along with transportation, policing will also remain a local cost, not shared. That’s because of municipal and provincial contracts already in place which will continue to be paid separately, at least for the time being.
In terms of shared services, there’s finance and administration, fire services, parks and recreation facilities, and tourism and recreation programming. The sharing of parks and recreation facilities has long been something the former town of Sackville lobbied for, especially when it came to larger facilities such as the Tantramar Civic Centre, with its expensive indoor rink.
Having parks and recreation facilities under shared services means that residents in say, the Sackville LSD, should be covering about 11.8% of the cost of the Civic Centre, because the former LSD has about that share of the tax base. It also means that all rec facilities, from Beech Hill Park to Dorchester’s Veterans Community Centre, would be covered in the same way.
Of course, the fact that residents of former LSDs will now be contributing to shared services will also mean changes in how those services are delivered, says Beal.
“We now have to evaluate where will we build the new parks, where will we build the new infrastructure?” says Beal. “Because if the local service district of Point de Bute and local service district of Sackville are contributing to those recreation services, then should they not have access to some playground equipment in their area? Should they not have access to recreation programs in their area?”
The balance of services “will take many months, if not years to develop and bring to fruition,” says Beal. “But that is something that the new municipality will need to evaluate.”
Borne says that one decision made by Tantramar council on Tuesday—to waive fees for non-profit rentals at the Dorchester Veterans Community Centre—represents a step in that direction. Previously in Dorchester, there was a cost attached to renting space in the centre. “There had to be a cost attached because we had such a small budget to operate facilities,” says Borne. “Now that we have the cost-sharing model, what a huge benefit for the entire region that we can now offer free rentals to nonprofits offering recreation programming out of that building.”
