Quesnel Council Holds Second Budget Meeting

Monday, February 14, 2011 04:03 AM

Quesnel, B.C. - Quesnel City Councillors will hold their second budget meeting of 2011 deliberations later today to review the city's proposed five-year capital plan...

Councillors directed staff to prepare the 2011 budget with an average tax increase of 5.5-percent, and no tax-shifting from the heavy industrial class to other classes. Approximately three-percent of the tax hike was needed just to maintain a 'status quo' budget after property assessments rose 4.4-percent in the city. The other 2.5-percent is meant to deal with continuing fiscal challenges due to significant losses in Quesnel's industrial assessment base.

Last year, Northstar Lumber was granted a final shutdown allowance that lowered its assessment by $2.4-million dollars and, as a result, the City of Quesnel lost approximately $145-thousand dollars in taxes.

And Quesel River Pulp successfully appealed its assessment - meaning another $180-thousand in lost municipal taxes. In addition, the appeal is retroactive, so the city will return about $685-thousand to West Fraser for 2009 and 2010. In anticipation of this, the city has about $565-thousand is in a tax reserve fund, but will need to contribute an additional $120-thousand this year.

If councillors stick to the 5.5-percent increase, the average homeowner (who's property assessment was up 4.4-percent this year) would pay $33.52 more in municipal taxes in 2011 over last year.

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Posted on Monday, February 14, 2011 04:03 AM in News by 250 News

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Comments

Posted by: NMG on February 14 2011 3:59 PM

I don't understand this story. It basically says that Quesnel is short money, but then it also says that taxes have been reduced for some of the larger operations in the city. I thought that tax reductions were supposed to encourage investment, increase competitiveness and create jobs, thus ensuring that there is an overall increase to economic activity?

Maybe the taxes just aren't low enough in Quesnel. I'm sure if they reduced them to zero that they would make up the difference through residential property taxes. This would be due to the new people moving there that would be filling those mill jobs that were created from the additional tax reductions.

Heck while we're at it, why don't we get rid of all corporate taxes whether they are levied by municipal, provincial or federal governments. After all, if a small tax cut can have such positive impacts, a complete reduction in taxes would surely save us!

Posted by: mwk on February 14 2011 5:43 PM

What I would be curious about is how West Fraser managed to win their Appeal to have their property taxes reduced?

Property taxes are based on a formula. I can't see the formula being wrong for one business and right for the rest. It probably came down to West Fraser is a big employer in Quesnel and started to complain. So when push came to shove big business won out.

For January to September 2010 the profit reported by West Fraser was $127.5 Million Dollars. Sure a big company needs to make money, but I doubt they are getting the short end of the stick. They probably sat down and tried to figure out where they could save some money. Send some letters and get a lawyer already on staff to do some arm waving and save yourself $800K.

So now the City of Quesnel will have to do without another $800K+. From a municipal budget point of view this is scary stuff.

I bet we start seeing the same thing from Canfor and other mills. And if we start to see this from more commercial/industrial businesses then each municipality will be shifting the burden onto the homeowners. More property tax increases to come.

Posted by: NMG on February 14 2011 6:17 PM

Scary indeed. And all of this revenue loss to the city for an amount that is an immaterial line item on their income statement. That's cool stuff, LOL.

The only way I could understand the logic here is if the assessed values for their properties was inflated and they fought to have it corrected. That I could understand.