EDITORIAL: Penticton services need tax hike

Do Penticton city councillors vote to raise the tax rate? It is the overriding question.

Between now and Dec. 18, every department at Penticton’s city hall will be presenting their 2014 budget proposals for consideration. It’s a long process as city council decides how to spend your tax money in 2014.

But overriding all the questions about which projects to support, what infrastructure needs to be repaired and all the other draws on the city’s finances, councillors are going to be thinking about one question over all:

Do we raise the tax rate?

It’s been three years since city hall decided to take more tax money from its citizens, but perhaps it is time for the holiday from annual tax increases to end.

According to the results of the city’s own community survey, completed in September, a chunk of the population wouldn’t object to a modest increase: 65 per cent would consider a one per cent tax increase acceptable and 55 per cent would consider a two per cent tax increase acceptable.

There are good reasons for holding the line on taxes, including drawing new people and businesses to settle here. But there is a downside too. While Penticton has been holding the line on its tax requirements, costs here and around the world continued to rise. And as in 2013, a shortfall is predicted for the 2014 budget year.

Last year’s $1.147 million shortfall was dealt with through a variety of cost cutting and efficiency measures, including drawing on some of the city’s reserve accounts. While those reserves are healthy, they are lower than last year and can’t be drawn on indefinitely.

A one or two per cent tax increase isn’t going to wipe out this year’s shortfall of $979,000 — that would take a four per cent increase — but a small increase is going to slow the rate of decline in those reserves.

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