Regional council will give Halifax homeowners a tax break this year so the average household bill will stay the same, despite a five per cent upswing in property assessments.
The city combines the urban residential tax and transit tax rates on property bills, and together they will drop by slightly more than four cents from last year to 82.4 cents per $100 of the assessed property value.
"If we were to keep the rates the same, we’d realize far more than the $10 million we need," Bruce Fisher, the manager for financial policy and review for Halifax Regional Municipality, told council in arguing in favour of the drop in the combined tax rate as staff recommended.
Plans for commercial tax rates were absent from the 2012-13 budget overview presented Tuesday. But councillors have asked staff to look into freezing the average commercial property tax bill and how such a move — and the resulting loss of revenue — would affect the rest of the municipality’s budget.
"I’m particularly concerned about small businesses looking at at least a one per cent increase in their commercial taxes," Coun. Tim Outhit (Bedford) said when asking for the staff analysis.
"Small businesses are the backbone of our economy . . . so what would be required as far as cuts to also freeze the tax increase for commercial (properties)?"
Outhit’s motion echoes comments that Valerie Payn, president of the Halifax Chamber of Commerce, made earlier in the day. She said the average eight per cent increase in commercial property values this year threatens to drive commerce from the urban core.
Coun. Dawn Sloane (Halifax Downtown) echoed Payn’s comments in urging her fellow councillors to look at freezing commercial tax rates along with the residential rates.
"We have individuals . . . on the peninsula here that were hard hit," Sloane said, citing a business whose assessment more than doubled.
"I’m hearing this from all businesses, and they’re very concerned that (those) on the peninsula are being taxed to death while those in the business parks are not being taxed as much."
The municipality’s 5,000 businesses rose in property value by about 6.3 per cent this year, with their total value pegged at $6.7 billion. Although the assessment increase is less than that for homeowners, commercial properties do not get the 3.9 per cent provincial cap.
The average home — worth $202,400, according to municipal staff — should not see a jump in its tax bill, even though a small increase in transit tax will be included.
Metro Transit, at a projected cost of $8.5 million in the next fiscal year, remains the city’s fastest-growing expense, staff say. Fares cover only 43 per cent of the service’s budget.
Coun. Sue Uteck (Northwest Arm-South End) argued that the increase in transit tax penalizes those in the urban core, as more than half of those residents drive to work. Why should they bear increasing costs for a service they rarely use, she asked.
"They are already paying more than double or triple their fair share."
But Coun. Jennifer Watts (Connaught-Quinpool) disagreed.
A sustainable transit system benefits the community as a whole, reducing traffic congestion for other commuters, she said.
The presentation Tuesday gave council only a small snapshot of what to expect when the full budget is tabled March 27, but staff indicated they plan to hold the line on operating costs through "efficiencies."
These include managing overtime costs, choosing contracts based on best pricing, and looking at whether to fill staff vacancies.
Little detail was presented about the capital budget, pegged at $131 million this year. That figure may fluctuate depending on whether council decides to pursue building a stadium to host some games in the 2015 FIFA Women’s World Cup.
Those details should be contained in the official budget, which council will debate the first week of April.
