ERIN — A proposed 4.5 per cent tax rate increase for Erin in 2023 is not set in stone.
In a report Erin’s council received at its Thursday meeting, there is $234,408 in a tax-related reserve could be used lower the 2023 tax increase.
During a presentation by director of finance and treasurer Wendy Parr, councillor John Brennan became curious.
“I’m looking at the reserves from December 2022 to December 2023 there is a disbursement from the tax stabilization reserve fund of $234,408,” Brennan said.
Parr explained that the amount of disbursement from the tax stabilization reserve has not been decided.
The 4.5 per cent tax increase does not take into account the impact of the $234,408 from the tax rate stabilization reserve.
“That did not adjust the tax, that is without an adjustment to the tax rate stabilization,” Parr said.
“That’s an anticipation again. And based on how we set the budget, that number will be adjusted,” Parr said.
Parr then explained that there is no correlation between the 4.5 per cent tax increase and the $234,408 disbursement. This implies that if the disbursement did happen, the 4.5 per cent would lower.
“But to arrive at the 4.5 per cent,” Brennan said.
“That number was not used,” Parr said.
“That number was not used?” Brennan said.
The $234,408 was not actually used to set up the budget. As well, that number may change based on decisions of council.
“No it was not used in setting up the budget. However, it is an anticipatory number. Again it is not set in stone. It was in there so I went with it. However, that’s a number that council can use, to adjust, yeah,” Parr said.
The current estimated tax increase for 2023 is 4.5 per cent or about $355,000.
“But what that works out to is about $79,000 equals one per cent tax increase,” Brennan said.
“Yup, definitely,” Parr said.
So if the disbursement of $234,408 in 2023 is carried forward, the tax increase would drop significantly.
“So If we were to go ahead and do this disbursement, am I right then in assuming,” Brennan said.
“Yeah the tax rate would come down,” Parr said. “That’s for council to decide.”
Jesse Gault is the Local Journalism Initiative reporter for GuelphToday. LJI is a federally-funded program.
Jesse Gault, Local Journalism Initiative Reporter, GuelphToday.com