An annual rite of passage for Estevan residents, and residents of most municipalities in Saskatchewan, is griping about property tax increases. Nobody likes it when their property taxes go up, even when the property tax increase is in line with a jump in inflation. But the vast majority of a municipality’s revenues are through property taxes. Want your city, town or village to continue to provide services? Accept a property tax increase. Most right-minded people will accept a property tax increase, as long as they see the money being put to good use, particularly when it comes to road repairs. Estevan residents have already gone through that annual rite of passage, since a three per cent property tax increase was approved earlier this year. An undesirable amount, but it is reasonable. Unfortunately, thanks to the provincial budget released last week, property taxes will likely carry a much larger increase. One thing that many people don’t realize is a significant chunk of their property taxes will be directed to the school
boards. Thanks to the provincial budget, the education portion of property tax will be ratcheted up to 40 per cent. Your taxes are already guaranteed to go up. This was one increase that most municipalities knew was coming. It’s better than the days when 60 per cent of property taxes went to schools, but 40 per cent is still frustrating, especially for those who want to see a much lower percentage of property taxes for schools. The municipal operating grants, which were a source of concern for municipalities before the budget, will continue to be equivalent to one point of the provincial sales tax (PST). Municipalities will get less money this year, since there was less money in the PST pool. But most municipalities knew they would see a decrease from the grants. The biggest hit of all will stem from the end to grants from SaskPower and SaskEnergy. Estevan stands to lose nearly half of its funding from the government, which, according to both local officials and the Saskatchewan Urban Municipalities Association, was not discussed before the budget.
It’s one thing to broadside municipalities with some form of a financial hit. It’s another thing to take nearly half of their provincial funding from their already stretched budgets, two months after they approved their budgets. Estevan city council is now tasked with a terrible conundrum: raise taxes again, even though local residents have already been hit by property tax increases on both the municipal and education fronts, or find about $1 million in savings. Needless to say, if they do the former, people will complain to the city, even though on this occasion, this would not be the city’s doing. If they select the latter, then virtually everything in the capital budget, except for the repairs to King Street and the purchase of the fire department’s new building, could be on the table. The city will also have to make up for the loss in provincial support in future years, too. So when your property tax bill goes up significantly, or when you notice a significant decline capital spending by the city, don’t blame council. Save your anger for the provincial government.