Charlottetown balances budget with no tax hikes
Charlottetown tabled a balanced budget for 2015 with no tax increase Friday afternoon, but it was a close call.
The city projects a budget of $46.75 million. The water and sewer utility projects a budget of $10.35 million, with no rate hikes.
A tax increase was narrowly avoided, says Coun. Melissa Hilton, chair of the finance, audit and tendering committee.
The city had run into an unexpected deficit of $1.2 million this year due to the high cost of snow removal, says Hilton.
And up until Thursday morning, the city had planned a five per cent tax increase, but an injection of $1.5 million from the province announced that day made it possible for the city to balance its budget.
Hilton says current service levels are not sustainable under the existing tax formula.
"The provincial funding of $1.5 million is tremendous and we are appreciative, but it is a one-time solution that doesn’t address the root issue," Councillor Hilton said in a news release.
Hilton says the city has been losing out on millions of dollars of revenue since the province changed the revenue-sharing formula for property taxes in 2008.
It's time to change the formula and give the city a bigger slice of the pie, Hilton says.
On average, residents pay $2,900 a year property tax, 60 per cent of which goes to the province.
Mayor Clifford Lee said, "A tax increase is coming the way things are going."
