Penticton residents will be getting a half-per cent decrease in their civic taxes this year.
Capping off an arduous line-by-line budgetary process which saw council eliminate the municipality’s burgeoning $868,000 fiscal shortfall to the tune of over $1 million worth of adjustments, Penticton council voted 4-2 Monday evening to transfer approximately $494,000 from the 2010 budget surplus to initiate a 0.5 per cent decrease in city taxes.
According to the city’s CFO Doug Leahy, the money would have went into an cumulated surplus fund for “operating purposes” in future years.
Mayor Dan Ashton called the tax decrease a “remarkable” accomplishment after years of rising operating budgets and taxes.
“We have built the foundation for the future on how we think the city should operate,” said Ashton. “We have had to look at our efficiency levels around here and we will continue to look at them, not only with staff but along with ourselves.
“(The tax decrease) isn’t something that needs to be the first and I hope it’s not the first.”
Coun. Mike Pearce said the decrease “sets a trend as we struggle with government getting bigger and bigger.”
“There is not one other council coming close to this,” he added later.
Coun. Dan Albas asserted that even a small “symbolic” tax reduction could produce significant outcomes.
“I would much rather be a symbol for hope where we are becoming a more affordable city,” said Albas. “People go where the opportunities are and I think this budget starts to say that Penticton is a great place to do business and we are careful with their money.”
Supporting the decrease, Coun. John Vassilaki said he would have preferred that council cut the 2011 budget further to find the necessary $494,000 rather than taking it from the city’s reserves.
“This is going to have a huge impact on the budget for 2012,” he warned.
Only Councillors Judy Sentes and Andrew Jakubeit voted against the tax reduction.
Jakubeit said the decrease equates to about $125,000, pointing to projects such at the old Nanaimo Hall site where council voted not to spend $12,000 on bike lockers and a parking ticket spitter which he said could have paid for themselves in three years.
“We have joked about some of the grant opportunities that we had (and have said) beware of governments bearing gifts and here we are giving the taxpayers potentially a gift. But what happens in the years following it?” said Jakubeit. “We have worked very hard to be financially responsible and I think coming in at zero per cent would exceed the expectations of the community.”
Sentes agreed, asserting that council should balance the city’s current economic woes with future concerns.
“I have heard over and over again from constituents who have been uncomfortable when they have been given breaks on their taxes and then in the following year it has been significantly different,” said Sentes. “So, what I have heard is to try and keep a balance and try to keep things in a very reasonable rate for taxation.
“I think that a 0.5 per cent decrease is not in the best interest of our community at all. I think they would have rather we put that 0.5 per cent back into services that they had lost. So, I would have been much happier to received a zero per cent or even a 1.2 per cent (increase) as opposed to the decrease.”
Coun. Garry Litke was not in attendance at the meeting.