Tax relief for St. John's pushed to 2017 budget

On the day that the St. John's Board of Trade brought a petition requesting immediate tax relief to city council, council members moved definitively to quash the petition and push tax reliefto the 2017 budget.

The Board of Trade petition which was co-signed by seven other business associationsand had over 1,000 signatures asked city council to provide tax relief right awayand eliminate a controversial taxonvacant properties.

But the deputy city manager of financial managementsaid it wasn't legally possible to change the 2016 budget and provide immediate tax relief. Instead, tax relief will have to be postponed to 2017.

Seven targets for 2017 budget

At Monday's council meeting, Councillor Jonathan Galgay went over a document that includedseven targetsthe city will aim to follow during the 2017 budget-making process. Council passed it unanimously.

The seven targetsincludea plan to reduce the commercial and residential property tax by between3.8 and 6.4 per cent the equivalent of a mil rate reductionbetween 0.3 and 0.5 mils.

The cut is somethingbusiness and property owners have requested. To reach that target,council will need to cut between $6.6 million, and $11 millionin its 2017 budget.

Every city department is also being asked to look for savingsand council is being asked to not increase spending.

According to the city,everything is on the table when it comes to cutting costs for the next year.

That means staffing must be kept at or below 2016 levelsandany expenditure increase must be accommodated within the existing budget.

"Let me be clear, any improvements and changes identified during the process aren't going to wait two years to be made," said Galgay, chair of council's finance committee.

"They will be made immediately, as soon as decisions are made. We have a review committee in placeand a process has already begun."

Water taxes arealso expected to rise 6.3% in2017 and total $56.7 million, an increase of $2.8 million from 2016.

While the city says it plans to reduce debt charges wherever possible for 2017, itacknowledges that the targeted mil rate reductionsmaymake that difficult.

Board of Tradedisappointed

St. John's Board of Trade CEO NancyHealeysaid her organization isdisappointedin the decision to delay thetax cuts to 2017.

"Taxes went up by about 14 per centon average this year, and that's been a big hardship on my members and on the residents of St. John's," she said.

According toHealey, by the time that tax relief comes, it might be too late for some local businesses.

"We're going into a softening, a slowing economy, and I'm not so sure that some of my members are going to be able to make it to 2017 when council is contemplating some tax relief."

The board of trade is lookingto meet with council in the coming weeks to discuss the vacancy tax, and that while the cuts in 2017 are a start, the organization still wants more to be done.

"There're a recognition that the budget was bad for business andbad for citizens and that's the first step," said Healey

"We still need to work to find some immediate tax reliefand we'll still be pushing council to see how we'll get some tax relief, tax credits, something in 2016."

It's the earliest the budget-making process has ever been discussed at city council. Councilsaid that's part of a new city mandate to do a better job of explaining how budget decisions are made.

Council is encouragingfeedback on the measures from all members of the community.