Describing it as a “challenging budget,” Regina city administration revealed a proposed 4.86 per cent hike to property taxes Thursday morning at city hall.
If approved by council, the proposed budget would see the average homeowner with a property value of $350,000 paying about $7.70 more per month or an additional $92.40 in a year.
The proposed budget is balanced based between revenue and expenses of $443 million, accounting for a $7.3 million increase from last year.
The city points to a continued funding shortfall due to cuts in the provincial budget last year to blame for the bulk of the mill rate increase. The cut to the provincial grants-in-lieu program works out to $4.6 million in reduced revenue. Meanwhile, the provincial revenue-sharing portion of the PST is down five per cent or about $2 million thanks to a drop in PST. The city will also lose out on a further $2 million from the province eliminating a fee it pays to the city for collecting the education tax.
Combined this represents an impact of 2.99 per cent on the mill rate increase.
A further 1.45 per cent increase is from prior annual commitments by the city to the residential road improvement program and Mosaic Stadium.
City manager Chris Holden explained administration was able to find savings of $9 million by absorbing the PST increase, reducing transfers to the reserve fund, finding ways to adjust the cost of city services and eliminating vacant full-time positions.
He clarified these savings are a matter of finding efficiencies: no one will lose a job from this budget and there should be no direct impact on service levels.
“There may be some minor adjustments in terms of some of the service delivery, but those are adjustments that we believe are responsible for the administration to make in terms of ensuring that we’re offering programs and services at a reduced cost,” Holden said.
Holden said it was important to maintain an annual increase of $3 million for the five-year capital investment plan into improving and maintaining major infrastructure.
The city is set to spend $132 million on capital projects including $18 million on streets plus $9.7 million on residential roads, $4.9 million to design and build a bridge on Eastgate Drive, and $11. 9 million for the waste management centre. This budget accounts for $12.4 million towards building a new transit maintenance facility which is a cost shared by the federal government.
This year, the city is also set to put $12 million towards redesigning and renovating the old Saskatchewan Transportation Company building to become the new police headquarters.
In the budget proposal, Regina police and fire services would be getting a combined boost of $4.3 million in funding for a total of $126.7 million in this proposed budget. This budget has already been approved by the Regina Board of Police Commissions.
“It’s no different than if you own a house and you need to replace the roof and the driveway is failing and etc. You make choices about where you can make the investments,” Holden commented. “This budget is really about making some careful choices to continue to advance in focused areas and we kind of said capital, police, fire.”
Regina Mayor Michael Fougere agreed this budget proposal goes in the right direction to stretch taxpayer dollars in a difficult financial time under strain from cuts by the province. As for the tax hikes, he said council will have to wait and see what they can do.
“Whether we have the right mix right now, whether it’s the right amount for a potential tax increase – we’ll have that discussion – and I would hope that council will look at reducing that number over the next month,” Fougere said.
He pointed out taxpayers have already been hit by provincial tax increases last year and he would like to minimize the burden.
The mayor added he is not interested in cutting or reducing any services to reach that goal, noting there are always alternatives to find savings to pass on to residents.
City council will vote on approving the budget on Feb. 27.