ERIN – A proposed tax rate increase has been reduced following council’s decision to use reserve dollars.
Town finance director Wendy Parr proposed an increase of 4.5 per cent for taxpayers to pay for department resources and capital requests amounting to $356,000.
But before council voted to adopt the budget and increase, councillor Cathy Aylard put a motion forward to have the budget amended.
Her motion requested $160,000 from the town’s tax rate stabilization reserve to bring the increase down, from 4.5 to 2.5%.
“This [is] in respect to our residents that are trying to make ends meet in a very trying time,” Aylard told council on Dec. 8.
The reserve dollars will cover some of the expenses in the budget that would have otherwise been paid for by the 2023 tax levy, thereby reducing the affect on property owners’ tax bills.
Some of the expenses to be funded by tax dollars include:
- office software upgrades ($12,000);
- septic inspections ($40,000);
- fire hoses ($20,000);
- sidewalk and road plows ($450,000);
- replacement of a 14-year-old Kubota tractor ($170,000);
- building upgrades ($15,000);
- park improvements ($45,000);
- two new pickup trucks and an electronic vehicle ($300,000); and
- design for a Barbour Field multi-use facility ($150,000).
Councillor John Brennan said the town has been fortunate to have surpluses in past years, allowing for the spare dollars to be placed in reserves for “exactly this purpose.”
“Using it now when our taxpayers are facing a tough time, that’s highly appropriate,” Brennan remarked.
Councillor Jamie Cheyne voiced concern about the long-term effect of tapping reserves to take the edge off rate increases.
“Yes, we have money, but if we keep going to the well … what will the implication [be] in four or six years?” Cheyne asked.
The Advertiser previously reported the town used $196,500 from the same reserve to reduce the 2022 rate increase.
Residents saw an increase of $53 to their tax bills this year for a residential home assessed at $600,000.
Parr responded to Cheyne’s concerns saying, “We’ve had a surplus every year” and the town is in a “good position” financially.
“I feel very confident that reducing the tax rate to 2.5% will work,” Parr said.
Council voted to carry Aylard’s motion, amending the increase to 2.5%.
That means a resident with a home valued at $600,000 will pay $45 more in property tax this year (it would have been $85 with a 4.5% increase), bringing in an additional $196,000 to the tax levy, according to the town.
For each tax dollar collected, the town keeps 27 cents (the rest goes to the county and school board) with 13 cents going to roads; eight cents going to planning, economic development and corporate services; three cents to parks/recreation and conservation authorities; and another three cents to the fire service.
