Taxes and finances have been a big focus of the most recent meetings of Estevan city council.
The meeting on June 6 saw council pass the mill rate factors for 2022. The city says most ratepayers should see an overall decrease in their tax bill.
There will be an increase in the education portion of property tax, a measure that comes down from the provincial government without municipal input.
But the city says the health levy will be lower than last year, now that the city’s commitment to the new nursing home committee has been fulfilled.
Two weeks earlier, the city received its audited financial statements, as of Dec. 31, 2021. It could be summed up as more of the same from recent years, as the long-term debt and the net debt are both lower than they were at the end of 2020.
While the city’s focus is actually going to be on net debt – the excess of liabilities over expenses – most people, when you talk to them about debt, want to know how much money the city actually owes. It’s also worth noting that long-term debt accounts for most of the city’s liabilities.
The net debt was at $16.77 million at the end of last year, down from $18.34 million at the end of 2020, while the long-term debt stood at $17.23 million compared with nearly $21.11 million at the end of the previous year.
Obviously, there is still a lot of work to go when it comes to the city’s debt load. They’ve been working away at it for nearly a decade, typically reducing the debt levels by approximately $2 million a year.
The city is still a few years away from finding itself in a situation in which it has no long-term debt, but it’s inching its way closer.
In a time of economic uncertainty in our community over the next few years, it’s imperative for the city to have as little debt as possible and to keep property taxes as low as possible.
Ever since 2017, when the city was forced to hike property taxes after Estevan and other municipalities got a significant funding reduction from the provincial government, the municipal portion of property tax has been relatively stable. There was a minimal increase in 2018, and no increases for 2019, 2020 or 2022.
Last year was a bit of an anomaly – the city had to make adjustments to its mill rate factors after the provincial reassessment. If they didn’t, they would have had a $5 million hole in their budget. Some people saw increases while others saw decreases.
As the city tries to attract new investment and new businesses to the community, it’s important for Estevan to be as competitive as possible on all fronts.
It’s not easy for a municipality to run with zero property tax increases year after year. Taxes account for the majority of a municipalities revenues. Typically, it’s not even close. In the case of the city, fees and charges are a distant second to taxes and other unconditional revenue.
If the city continues to forego property tax increases, eventually it will have to make some tough decisions on which services it is going to offer, which ones will have to be curtailed and which capital projects will be completed.
So far, the city has been able to keep on top of capital needs and road repairs. You don’t hear the same level of complaints as you did 15 years ago about the state of our streets and avenues. And this year the city is embarking on a new residential road resurfacing program that will hopefully continue for years to come.
It’s definitely going to be a challenge operating without a property tax increase this year, with the cost of virtually everything soaring. Local ratepayers will be happy the municipal portion of property tax didn’t increase.
If the cost of doing business continues to soar, then the city won’t have any choice but to increase taxes in the coming years.
