Lacombe County council voted to boost commercial and industrial taxes on Thursday although some councillors questioned the timing given the struggling economy.
“I’m not sure this is a great time to be increasing our taxes on the non-residential,” said Coun. Ken Wigmore. I think in many ways they are the ones going through the tough times.”
Wigmore said he would like to see the county take a closer look at its operations to find savings.
In the draft budget before council, tax increases of 2.5 per cent were proposed by staff for residential, non-residential and machinery and equipment (a tax that applies to major industrial ratepayers such as Nova Chemicals).
However, some council members favoured a further one per cent tax increase — raising them by 3.5 per cent — for commercial and industrial ratepayers would better divide the tax load and mean taking less from a reserve fund to balance the budget.
Lacombe County has long had among the lowest non-residential tax rates in comparable municipalities. In a comparison chart given to council, the tax rate is the lowest by far of 17 counties and municipal districts surveyed.
Increasing non-residential tax rates has been on the table before but previous councils did not make the change.
Coun. Dana Kreil questioned whether drawing on reserves for the budget was sustainable over the long term.
“We don’t know what’s coming our way,” said Kreil. If tax increases are kept low by dipping into reserves there is a risk they will be depleted and ratepayers will face a spike in their taxes to make up the shortfall.
Raising the low non-residential tax rate now could provide more financial security. Many businesses are hurting in the present economy “but at the same time we have to bite the bullet” and raise the non-residential rate, she said.
Coun. Brenda Knight agreed with the higher non-residential increase to take some of the burden off residential ratepayers.
“Maybe it’s time show we are going to make that differential,” said Knight.
The additional one per cent rate increase would raise about $217,000, reducing the amount the county will take from its reserve this year to just under $350,000.
Knight agreed it is time to look at other financial measures.
“If we are truly looking for efficiencies, maybe now is the time to look for efficiencies.”
Council voted 4-3 to change the budget to reflect the 3.5 per cent non-residential increase with councillors Knight, Kreil, Keith Stephenson and Reeve Paula Law in favour.
Another motion to direct staff to undertake an efficiency review of county operations was passed unanimously.
It is expected to involve hiring an outside consultant and will likely take a year.