ERIN — Town council put the tax stabilization reserve to work, bring the 2023 property tax increase down to 2.5 per cent.
Up until the Thursday afternoon meeting, council was working with a draft 4.5 per cent tax increase in 2023. The newly chosen tax increase of 2.5 per cent equals $196,000 of increased tax dollars to be collected.
So for a house assessed at $600,000, that is an increase of $45 for the township portion of property tax bills.
One area the town’s 2023 budget that is significantly increasing are building related expenses, set to need additional funding of $365,498.
Use of the reserve was proposed by Coun. Cathy Aylard who acknowledged that, in a general sense, this is a particularly difficult time for residents to cover all of their expenses.
“This was in respect to our residents that are trying to make ends meet in a very trying time. So to lower the tax rate in whatever way we can while respecting our budget implications,” Aylard said.
Coun. John Brennan offered his support for Aylard’s motion.
“The money in the tax stabilization reserve fund was put aside for exactly this purpose,” Brennan said.
Brennan also agreed this is the right time to dip into the tax stabilization reserve.
“We’ve been fortunate enough in the past to have a number of surpluses and we’ve been able to devote that money equally between the tax stabilization reserve and also the infrastructure reserve fund. So using it now when our tax payers are facing a tough time I think that’s highly appropriate,” Brennan said.
Even with the removal of $160,000 from the reserve, there will be plenty more funds for future challenges.
“And if we look at it, I think it will still leave us approximately just under a million dollars in the reserve that we still have for future rainy days,” Brennan said.
However, Coun. Jamie Cheyne highlighted that it is necessary to consider the council’s budgetary situation for the future and alluded to the reality that excessively taking money out of the tax stabilization reserve could have problematic implications.
“Carrying on with what councillor Brennan said, there will be approximately a million. But if there is a rainy day every year for the next four, how will we be in five years? What’s the implication long term?
“Yes we have the money. But if we keep going to the well at this time, it is fine I see. But what will be the implication in four or six years if we keep, I don’t have the numbers in front of me, how much we’re putting in every year. So where will we be in theory in five years?” Cheyne said.
On the other hand, director of finance and treasurer Wendy Parr (who prepared and presented the 2023 budget and current forecasts up to 2026) agreed that now is a smart time to take out money from the tax stabilization reserve to minimize taxes as is possible.
“Last year we did make use of the tax rate stabilization fund as well, approximately $200,000. So we’ve had a surplus every year. I have looked at Q3 we’re in a good position right now. So it’s, you know, good planning,” Parr said.
Jesse Gault is the Local Journalism Initiative reporter for GuelphToday. LJI is a federally-funded program.
