Tax-rate vote sparks debate among Fredericton councillors about affordability

Fredericton councillors agreed in principle Monday to reducing the city's inside tax rate by a cent next year, but not before they debated whether the decrease should go further because of concerns residents are struggling to make ends meet.

"It would have shown that we're making an effort … to make it more affordable," said Coun. Steven Hicks.

Councillors approved a budget that would reduce the city's inside tax rate from $1.3386 to $1.3286 per $100 of assessed value next year.

They also voted to increase the outside tax rate, paid by residents who enjoy fewer services, by five cents — from $1.0565 to $1.1065 per $100 of assessed value.

Residents of areas newly annexed by the city through local government reform would also see their rate go up by five cents.

But before councillors ultimately approved in principle those tax rate changes, Hicks introduced a motion to increase the inside rate cut by an additional two cents, and another motion that would freeze the outside tax rate, while allowing for the five-cent increases in the varying rates paid by residents in newly annexed areas.

"I do understand we've got escalating costs, but our residents have had to bear a tremendous burden for inflation … in their own homes," he said.

Hicks noted the increases the city has seen year over year in property assessments by the province.

This year, the city generated $135.7 million in property tax revenue, and following the release of assessment figures for next year, the city anticipates it will generate $148.2 million, for an increase of 9.24 per cent.

"I think we need to do our part to try and bring things down, and we have a lot of needs, and we have a lot of wants and we have to prioritize those," he said.

"I think things have gone pretty good the last few years and it's time to tighten things up."

In response to Hicks's motions, Deputy Mayor Greg Ericson said he didn't think reductions to the tax rate were the fairest way to go about improving affordability.

"You can say it helps the average family home by a certain amount of money, but it helps those in big houses with big incomes even more, and that's unfortunate because I don't think that's the intent of it," Ericson said.

Ericson added that of all the taxes residents pay, only about 15 per cent are those that go to the municipality, making the provincial and federal governments also responsible for improving affordability.