Council met on Monday, March 13th for a Committee of the Whole Meeting. The purpose of the meeting was to finalize the apportionment of taxes. This is a continuation of the article entitled: THE BUDGET AINT OVER JUST YET
When Council met to apportion taxes Wednesday, March second, they discussed whether or not they should shift taxes from the commercial sector onto the home owner. This motion in particular failed and it was Councillor Randy Halyk made a motion not to change the apportionment to industry which passed.
With some instruction, the administration came back to Council with four scenarios. These scenarios were put off to the Committee of the Whole meeting because Councillor Corinne Scott requested more time to look over them.
Municipal Manager Trafford Hall explained the way they used to do taxes. Traditionally, the community would keep the apportionment of the taxes the same from year to year. If Alcan was the only industry, they would be paying 80% of the taxes. When Eurocan came along, Eurocan took a part of the 80%. When Methanex came, they took a part of the 80%.
With each new industry, Alcan paid less. However, when Methanex left, Alcan and Eurocan took up the slack. When Eurocan left, Council changed their policy so everyone took up the slack from the fallen industry.
The four options put towards Council meant different things. If they freeze the apportionment levels at 2010 levels, Alcan would see an 8.86% increase in their taxes, while the average taxpayer would see a drop of 11.07% in their taxes. At the other end of the spectrum, the average taxpayer would see a 2.57% increase in their taxes which would mean an increase of 3.08% to Alcan’s taxes.
Scenario C would mean a 0% increase to average taxpayers across the board and a 4.14% increase to Alcan. While it was not touched upon by Council, Scenario B would mean a 4.19% decrease but a 5.85% increase to Alcan.
Mayor Joanne Monaghan wanted to know what was wrong with Scenario D. Hall explained it was what they were balancing their budget to but Council wanted to go back to the way things were, with class 4, Major Industry, paying 75% of the apportionment. He said the entire Council voted for it with the exception of Scott. However, after some discussion, administration wondered if Council knew what they voted for so they brought it back.
Monaghan was still confused because she could swear they voted in Scenario D, citing it was in all the papers. Hall said this was the assumption they were working on. They needed a decision. When they had direction, they crunched the numbers. The decision made at Council on March 2nd was scenario A.
Councillor Gerd Gottschling stated there were a lot of unemployed people in Kitimat and a lot of unoccupied homes. “There are people who would find this is a real hardship to pay the 2.57%, as compared to industry who is not only making good money on aluminium, but also returns on power sales,” said Gottschling.
“This town was built around the Alcan Industry originally. This town was built to serve the Aluminium industry and Alcan was always happy to maintain this town in a liveable situation so they could attract the finest workers, highly skilled workers and they were a part of a community that is attractive to families.”
Gottschling made a motion to stick with scenario A. Councillor Scott couldn’t understand why they were not going to increase the taxation on class 6 to make up the money lost from Eurocan. Eurocan is scheduled to move into class 6 in 2012. However, she changed her mind when she found out this was: Business: Other.
It was brought to the attention of Council this new motion was the same motion which was made on March 2nd. It had already been passed. Hall explained everyone’s taxes went up 20% last year to make up for the loss of Eurocan. He expressed the District was losing another 2 million dollars which they would have to find. Council could change the apportionment year to year.
“I do not believe major industry’s taxes are outrageous at all, just because they pay a higher proportion. After all, they were the sole beneficiaries of the growth in class four, the current situation on our table is Scenario A. They are the sole consequence of the reduction in class four,” said Hall.
Gottschling expressed every dollar the home owner pays is a greater burden to them than every dollar industry pays. Scott suggested one of the middle scenarios would be more to what Gottschling was saying. She suggested being in the middle of the road. Gottschling reminded her Council raised taxes 20%.
Scott made a motion to look at scenario C. She suggested Scenario C would keep the residential and utility taxes the same as last year, they were neither increasing nor decreasing taxes. In the mean time, Rio Tinto Alcan would see a 4.14% increase, which was half the increase of Scenario A.
Scott explained Scenario C would allow people to maintain taxes. Rio Tinto Alcan’s taxes would not be going up to give a residential tax break. The motion was called, but it failed. Only Councillor Scott was in favour. There were no further motions so Council moved on to their five year plan.
This means the average taxpayer will see a decrease of 11.07%. With this decision, Alcan's taxes will increase by 8.86%. Alcan’s taxes will be a total of $11,772,605 while Eurocan will pay $2,987,727 in taxes. Those industries paid $10,834,357 and $5,764,190 in 2010, respectively.
It does not make any sense...