Moncton proposing to cut tax rate by 6.2 cents for most of city

Moncton is proposing a 6.2 cent tax rate cut for most of the city next year while boosting spending on police, firefighters and transit.

"The City of Moncton's financial position remains strong," Jacques Doucet, Moncton's general manager of finance services, said as council began going through the the 521-page draft budget Tuesday.

"But it doesn't mean we don't have challenges. Everything is about prioritization and we can only invest so many dollars in so many areas."

The document covers the city's $223.8 million operating budget, a utilities budget of $46.2 million, and a $62.6 million capital budget.

Doucet said the goal of the tax rate cut is to limit the increase to property tax bills for residents driven by assessment values set by the province.

Staff proposed a tax rate of $1.3614 per $100 of assessed value for most of the city, down 4.34 per cent from 2024. 

While the tax rate would be lower, overall a property tax bill would still increase by 5.23 per cent because of higher assessments.

The budget shows a home valued at $350,000 would see its tax bill rise by $260 to $5,241. 

Increase for amalgamated areas

While much of the city would see a lower tax rate, areas formerly part of the Moncton local service district amalgamated in 2023 would see a tax rate increase of five cents. That would bring the rate to $1.0158. 

The tax rate and various budget figures could change before final approval. Coun. Bryan Butler has moved a motion that would reduce the increase to 2.5 cents. That motion will be considered Thursday.

The proposed budget includes a number of additions, including:

• A $9.5 million increase in the policing budget, which includes 17 more RCMP officers.
• Four more firefighters.
• Expanding Codiac Transpo bus service at a cost of $435,042.
• New or replacing buses, including one to test switching to electric buses.
• $500,000 to plan a new aquatics facility and $5 million to build it.
• $8 million in 2025 and $17 million in 2026 for downtown facilities such as "a new market, convention centre, or riverfront amenities."

The budget calls for 38 more full-time equivalent staff positions, bringing the city to just under 800 full-time positions.

Of those, 18 are related to increased Codiac Transpo bus service. Sixteen fall under protective services, which include firefighters, community safety officers and municipal support staff for the RCMP.

Council heard that Codiac Transpo has recorded a nearly 40 per cent increase in ridership this year, resulting in some buses being full.

The budget includes money to expand the bus depot as the transit fleet expands.

The budget also calls for a $765,000 increase in the city's grant to Ability Transit, a transportation service for physically disabled people.

Gregg Houser, the city's deputy treasurer, said the service has a two-week waiting period to book rides and currently isn't able to serve everyone. He said it has about 1,000 clients and is looking to serve 1,300.

The budget says an average household will pay $1,128 in water and wastewater fees next year, an increase of 1.17 per cent.

Earlier this year, council approved a budget strategy that called for limiting how much additional revenue the city would collect as a result of higher property assessments.

Doucet said 85 per cent of properties in the city are covered by the province's spike protection mechanism, which limits yearly assessment increases on those properties to 10 per cent.

To counteract that, the budget was planned to only collect just over five per cent, effectively resulting in a tax rate cut.

But Doucet noted the rising assessments are mainly on residential properties and that some commercial properties have reduced assessments. 

That means those commercial properties would see a greater benefit from the tax rate cut. He said the city is advocating the province reform the property tax system to allow different tax rates for different classes of properties. 

"If we had more flexibility, we don't necessarily want to tax their commercial properties more, but we could do a better distribution of the fiscal burden," Doucet said.

The city projects its debt will rise from $85 million at the end of 2024 to $134.8 million for the general fund next year, mainly due to the completion of the $57.3-million police station.

Even with that increase, the city's debt radio for the general fund is expected to remain below 10 per cent. The provincially set limit is 20 per cent.

Budget deliberations continue Wednesday with discussion of the policing and fire department budgets.