Penticton’s three year holiday from overall tax increases came to an end today when council passed the 2014 budget, including a two per cent tax hike.
For the average residential taxpayer, that increase will translate to approximately a $27 property tax increase, according to chief financial officer Colin Fisher.
“I am very comfortable with the two per cent tax increase. I know the public has been saying they find that as a comfort level as well,” said Mayor Garry Litke. “It’s a tax increase the public has been expecting and can tolerate. I do not agree with the point of view we dip further into our reserves in order to balance the budget.”
This morning, the final day of budget deliberations, Penticton city council still had to deal with a $935,000 shortfall in order to balance the budget, down from $1.2 million at the start of the process. Through the course of the day, that was whittled down to $682,000.
Unlike previous years, council voted not to draw on the city’s general surplus reserve fund in order to balance the budget. For 2014, they will only be drawing $185,000 from the reserve to make up the shortfall not covered by the tax increase. That reserve is currently about $5.4 million.
“Those reserves are not going to be sustainable over the long term if we continue to use them to balance our budget,” said Litke. “We do need that in the event of a rainy day. It’s not great, but it’s adequate and to continue to deplete that reserve would be a mistake.”