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Taxes, spending fall in 2017 St. John's budget

City budget balanced at $294.4M, down $8M from 2016

Posted: December 12, 2016
Last Updated: December 13, 2016

Homeowners in St. John's will see a tax break in 2017, with average municipal bills poised to return to 2015 levels.

Mill rates and water taxes are dropping in the municipal budget, which was passed at the regular council on Monday afternoon.

Both the residential and commercial mill rates will drop by 0.5 mills to 7.3 mills for residential taxes and 24.7 mills for commercial taxes. Water taxes are dropping by $50 per resident.

"It's a very positive feeling that we've been able to deliver a budget which has significant positive impacts for all people of our city," Coun. Jonathan Galgay told reporters after the budget passed. "I think this is a great, great budget."

According to the City of St. John's, property taxes will return to near-2015 amounts for the average homeowner.

A house with an assessed value of $230,000 will be charged $2,259 in 2017, down about $150 from 2016. Most properties will see savings between the $150 to $250 range next year.

Coun. Jonathan Galgay says alongside a temporary 20 per cent reduction in business development fees, the tax break will help stimulate the municipal economy.

"The City recognizes that creating the right climate for business to succeed benefits all residents of our City," the city's finance chair said in his budget speech.

"A healthy, robust economy is essential for all residents to improve their quality of life."

Galgay said the reductions in property taxes is "a significant amount of money for people on fixed income."

The city's 2016 budget, which included hikes in the water tax and the average tax bill, was met with backlash by residents and business owners.

Galgay said the process for drawing up the 2017 budget started immediately after the 2016 budget was unveiled.

In 2017, overall revenues will drop about 2.6 per cent, from $302 million to $294 million yearly, but spending is also down.

No impact on services, city says

The equivalent of about 74 full-time jobs will be cut in 2017,  part of a cost-cutting plan identified through a program review.. 

"We commit to continuing to find efficiencies in an ongoing way," Galgay said in his budget speech.

"We have a new group of dedicated staff that will focus primarily on organizational structure, so that program review will not just happen when council decides that it needs to happen," he told reporters. "Program review will be a continuous process."

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Though spending will go down in snow clearing, road maintenance and some building inspection services, municipal officials promise residents should not see any impact to front-line services.

Galgay said the city was able to save money on snow clearing because of an altered schedule.

"We are committed as a council that we are able to maintain the same level of service that people have been receiving," he said. "It's been something that has been a constant reminder as we've gone through this process." 

Fees up, new services on the horizon

The budget will implement a variety of fee hikes that were announced in November, including the hike in Metrobus fares.

Fares will rise 25 cents per ride, to $2.50. Galgay said the hike was a "very challenging decision", but said St. John's subsidizes Metrobus at a higher rate than other comparable cities, and said the new money will be used to add accessible routes and bus shelters.

The proposed budget does lay the ground work for some new services.

The city will be purchasing new garbage trucks with technology equipped to handle automated collection, with a view of rolling out automated pickup in St. John's in 2018. 

Galgay said automated garbage pickup was a top request that councillors heard in the pre-budget consultation process. He explained the city was set to replace some garbage trucks in their fleet already, and the city did not move towards automated pickup now, it would not have another opportunity to do so for 10 years.

The budget will also launch a new downtown beautification unit, and will re-instate a summer litter pickup.

The budget was passed 10-1, with only Coun. Sheliagh O'Leary voting against the spending program.

With files from Jeremy Eaton