RELATED: Town splits 4-3 on budget vote
Digby town council has raised commercial taxes five per cent from $3.99 to $4.18 per $100 of assessment.
The residential tax rate also rose five cents from $1.94 to $1.99.
“It was a tough budget,” said Mayor Ben Cleveland. “And unfortunately we had to raise the tax rates. It hadn’t changed significantly in the last number of years”
The mayor said many factors came together to force council’s decision.
“The price of power, of fuel, of everything has doubled and we’ve tried to absorb that,” he said. “But it just wasn’t possible to hold the tax rate any longer.”
The mayor says revenue hasn’t kept up with cost increases.
“Assessments have stagnated and we lost the Business Occupancy Tax,” he said. “We chose not to recoup that all at once but phase that in over a number of years. Maybe in hindsight that was wrong.”
The business rate rose 10 cents last year after being at $3.89 since 2009/ 2010.
The residential tax rate had barely moved since 2005/ 2006 when it was at $1.93. It dropped in 2008/ 2009 to $1.92 and then came up to $1.94 last year.
Council hiked the residential garbage rate by $7 for the second year in a row to $221.
The sewer rate however will go down down this year to $5.55 from $5.95 per 1,000 gallons.
The budget report by town CAO Tom Ossinger points out several “obstacles” that had to be overcome this year, making the tax increases necessary.
Residential and Resource Assessment rose by only 1.71 per cent which Ossinger points out is less than inflation.
Commercial assessment decreased by 5.03 per cent. While the residential increase would have meant $27,000 more for the budget (with a steady tax rate) the commercial decrease worked out to a $47,000 loss to revenues.
The town also lost about $11,000 in taxes from one business property.
The mayor says comparisons to tax rates in the municipality aren’t fair.
“The formula that applies to all municipalities for calculating how much gas tax we get for infrastructure needs to be adjusted for municipal units that have to maintain their own roads,” he said. “Especially when you consider the vast majority of people using our roads and streets are people coming in from the municipality. We want them to come in and use our services, but we also want the formula to fairly reflect our greater infrastructure costs.”
The mayor says it is also incumbent on council to start looking for other sources of revenue.
“We’ve seen Canso disappear, other towns are teetering we face a lot of challenges but Digby has always been fairly healthy. Down the road, cuts are going to have to be made, but we also have to look for more revenue.”
He says in business, when times are tough you start looking inward for efficiencies to reduce costs.
“But you can only do that to a certain point before you aren’t providing services, you aren’t really operating anymore,” said Cleveland.