Taxes for businesses in Penticton will continue to drop next year compared to residential.
On March 21, city council voted to continue with the strategy they adopted in 2015 to reduce the business tax rate multiplier to 1.5, over a four-year period. For 2016, that multiplier will be reduced to 1.58 from 1.625 in 2015.
What this means for the residential taxpayer is that a larger portion of the city’s annual tax requirement falls on their shoulders—in 2015 that amounted to about $7 for each household. The objective of the change, according to Colin Fisher, the city’s chief financial officer, was to make Penticton one of the most competitive and cost-effective municipalities to operate a commercial business.
Fisher’s report to council showed Penticton in about the middle of the pack when compared to other communities with similar promotions of businesses on the assessment roll. Osoyoos was the next lowest community with a 1.6 multiplier, and Port Alberni the next highest. at 1.634. Vernon had a 2.74 multiplier in 2015.
Though the plan to reduce the business multiplier was only introduced in January 2015, Coun. Judi Sentes advocated to put the program on hold this year.
“There was a lot of discussion whether this multiplier should be dropped that low and it was a very narrow margin of council that said let’s give it a try,” said Sentes, noting that at that time they also discussed revisiting the decision.
“I am wondering if we can’t hold class six, business and other … just sort of hold that for a year, rather than the aggressive four-year plan to drop it all the way to 1.5,” said Sentes.
Sentes received support for her motion from Mayor Andrew Jakubeit, but other councillors preferred to keep on with the strategy.
“We made a plan a year-and-a-half ago, and I think we should do that,” said Coun. Andre Martin. “It is important to do what we can to help these businesses in terms of the tax rate.”
Martin also pointed out the businesses also employ all of the other taxpayers.
“I see this as the least we can do. If would like to see a tax free zone for businesses. That would be an enticement to get people here,” said Martin.
Sentes’ motion was defeated 6-2. A second motion to accept the staff recommendation to continue reducing the multiplier and move other multipliers in incremental steps between 2016 and 2018 to the average for the same tax classes in comparable communities passed 6-2, with Sentes and Jakubeit opposed.