The municipal council is once again grappling with the difficult decision of setting the mill rate for the new amalgamated areas of Chamcook and Bayside – hoping to keep the rates fair and equitable.
Recently, the town held a meeting with residents to explain the province’s model, which could have resulted in a nearly 19 per cent increase in the mill rate for those two areas.
The meeting was filled with intense exchanges, with some saying they felt they had no voice throughout the municipal reform process and are now left with the consequences.
Read more: Chamcook and Bayside residents decry possible 19 per cent mill rate increase
Darrell Weare, the councillor for Bayside, said in his mind he couldn’t reconcile on the mill rate.
“I can’t see how we can have one rate for the three wards,” he said. “The two wards outside the old town don’t get near the services.”
Weare said one section of the Local Governance Act specifies that if one area is not getting the same level of service as another, the mill rate should not be the same.
He said they are not a homogenous group.
“Not physically or financially,” he said. “I’m not saying we have to delve into in its entirety but it’s something that we should be aware of and try not to make exact decisions but attempt to do a reasonable allocation of cost.”
Coun. Mark Bennett agreed, adding he felt Weare—who is an accountant by trade—and chief administrative officer Chris Spear should get together to assess the services and how they would be allocated to each area and assign the appropriate level of costs.
“Just seems like we have a very good situation here, having two accountants in the room, and who (are) better to look at numbers,” he said.
Consequences of incomplete reform
The council debated how to determine the fairness of the tax rate by going line-by-line to determine who would use each service more.
Mayor Brad Henderson said that process would require looking at everything, not just selecting a few different things out of the budget.
“It goes both ways is what I’m getting at here,” he said. “We can’t just pick the two that want to be talked about, we’ve got to pick all the ones where we think the allocations of taxation are not what they should be.”
Read more: Councillors in Saint Andrews spar as budget discussions continue
Henderson went on to say he feels this struggle the council is facing is the result of incomplete municipal reform.
“This is about how the community moves together as one through a very difficult and incomplete municipal reform process,” he said during the meeting.
Premier-designate Susan Holt promised during the election campaign to put in place interim measures to help municipalities while it completes the fiscal reform needed by municipalities.
Other municipalities facing similar challenges
Saint Andrews isn’t alone in this multiple-mill rate challenge.
In nearby Eastern Charlotte, Mayor John Craig said council will need to determine the rates of several amalgamated areas, including Blacks Harbour, St. George, Beaver Harbour, Bonny River, among other areas.
“We’ve got so many different areas getting so many different tax rates and we’ve got to try and get them more in line so they are fairly close to being the same,” he said.
Eastern Charlotte Mayor John Craig said they hope to keep things fair, but council has not yet discussed the 2025 budget. (CHCO-TV)
The council hasn’t yet discussed the budget, so Craig said nothing is promised yet in terms of mill rates.
On Wednesday, the provincial government, fresh off an election, released the property assessment numbers. It is the only source of funding provided to municipalities. Henderson said previously the delay in releasing those numbers may impact a municipalities ability to meet the deadline for budget submissions.
Assessment base grows again
Provincially, the assessment base in New Brunswick grew by 8.8 per cent over last year.
In Saint Andrews, the assessment base grew more than the provincial average, coming in at 9.9 per cent. Neighbouring St. Stephen grew by 8.9 per cent.
While in Eastern Charlotte there was an assessment base increase of 8.9 per cent, as well. On Grand Manan, the assessment base also went up by 7.9 per cent.
The challenges of setting different rates for areas previously under the jurisdiction of the Department of Local Government and Local Governance Reform is far-reaching.
Fiscal reform needed
Union of Municipalities of New Brunswick president Brittany Merrifield, who is also the mayor of Grand Bay-Westfield, said this year is tricky for everyone.
“For many municipalities, post-structural reform, budgets are really different than they have been in the past,” she said in an interview. “We’ve got multiple tax authorities, we’ve got multiple rates. We have different levels of service. So that’s a real challenge to reconcile.”
There is currently no other form of funding for municipalities and there was a reduction scheduled in the equalization grants planned for municipalities, despite the increase in services.
UMNB president Brittany Merrifield said fiscal reform is needed to protect both tax payers and municipalities.
“There’s a real lack of diversification there, which means there is a lack of resilience,” Merrifield said. “That means that there is an overstated reliance on, in particular, residential taxpayers to foot that bill so that that challenges municipalities to deliver affordability. We are all focused on delivering affordability to residents while ensuring that we can still deliver the services expected by our residents.”
A reliance on property assessment alone means taxpayers are not protected from spikes or dips in the amount of assessment. In recent years, thanks in part to newcomer immigration and inter-provincial relocation, assessments continue to rise in New Brunswick.
Merrifield knows that may not always be the case.
“If you want to apply principles of fairness, fairness, and equity to the property tax system, then we need to look at diversifying that revenue to help protect our ratepayers from spikes in assessment, but also protect municipalities from drops in that assessment base,” she said.
Budget debate continues across all municipalities in the province, who are required by legislation not to carry deficits.
Author
