Proposed tax levy stirs debate at Thunder Bay council meeting

City hall's proposed tax levy increase in the 2014 budget generated some discussion among Thunder Bay city councillors at its meeting Tuesday night.

As part of its presentation to council on its long-term financial outlook for the city, administration is proposing a 3.45 per cent increase to the tax levy over last year.

That means, to make its proposed budget work, city hall has to collect more from taxpayers this year.

Coun. Linda Rydholm said she worries how that number will sound to homeowners.

“I am a little concerned that some folks out there. If we tell them [there’s a] 3.45 per cent increase levy, they're going to think that looks pretty high.”

Rydholm, along with some other councillors, were looking for a dollar amount a homeowner can expect to pay.

“For many homeowners, that's often easier to understand than [a] tax levy,” Coun. Andrew Foulds said.

Nailing down a number

But one city staffer said that calculation is not possible right now.

Thunder Bay treasurer Carol Pollard said an individual’s home's assessed value has to factor into the equation.

“We can't make that statement as a broad statement for all particular properties. It would only be relevant to your particular situation.”

City manager Tim Commisso elaborated further:

"It's relative to the change in your assessed value as well. So as much as we can say … on average …  if you're living in an area that, generally speaking, the assessed value is going up higher than another area, it's the same tax rate, [but] you'll be up more than that."

Administrators also pointed out that decisions on how much tax is paid by different city sectors, such as industrial and residential, aren`t made until the spring.

Councillors can also make changes during budget deliberations that start next week.

Part of the 3.45 per cent tax levy increase will be offset by taxes collected from new construction that's taken place in the city, which can bring the tax levy increase down to about a two per cent on existing properties.

Spending money to save money

Infrastructure renewal spending also came up, as the city's Enhanced Infrastructure Renewal Program is part of the reason for the tax levy increase.

The city has put money aside with every budget since 2011 for infrastructure upgrades. This year's budget proposes $2.5 million be set aside.

"It's well-known that maintaining infrastructure properly avoids larger future costs,” Commisso said.

To which Foulds added: "If we don't make this kind of investment in our infrastructure, the gap will increase and eventually our infrastructure will fail, and at that point in time, the future generations will have massive tax increases to try and cope with it."