Mil rates are down and commercial water taxes are up in the City of St. John's record-setting budget for 2013.
The city has budgeted $244 million in expenditures for 2013, an increase of 3.8 per cent over 2012. That expenditure growth rate is down from 4.2 per cent for the previous budget.
The $244 million price tag on the budget is the largest in the city's history.
The residential mil will decline from 10.6 to 8.1, while the commercial militates falls from 31.4 mils to 26.2.
There will be no water tax increase for residential homeowners, but businesses will witness an increase that will effect the city's net water tax revenue from the commercial sector by 27 per cent.
Coun. Danny Breen, chair of the finance and administration standing committee, says in light of the increase in property assessments the city could afford to drop the 10.6 mill rate and still balance the budget.
“The budget process for this year was challenging,” Breen said, in a news release.
“Not only are we in the first year of a new assessment cycle which saw property values increase significantly throughout the city, we are also moving forward with blending the Business Occupancy Tax into the Business Realty Tax and we have moved to a three-year budget process.”
The City of St. John’s is not increasing the water tax for residents who account for 39 per cent of usage while commercial users such as Memorial University and the provincial government, which account for 61 per cent usage, will see a 27 per cent increase in fees.
Highlights for 2013 include:
• Decrease in the Residential Property Tax mil rate to 8.1 mils. The mil rate was previously set at 10.6 mils.
• Decrease in the Business Property Tax mil from an effective level of 31.4 mils to 26.2 mils.
• No increase in water tax for residential properties;
• The commercial water tax rate will be increased from $0.88 per cubic meter to $1.32 per cubic meter. The commercial meter rates will be reduced by 20 per cent. The net effect will be a 27 per cent increase in the water tax revenue collected from the commercial sector. This will begin to address the inequity in the water tax system which currently sees residential properties paying a disproportionate share.
• The city has asked the provincial government to approve an increase in the Accommodation Tax from three to four per cent to support the marketing initiatives of Destination St. John’s and the expansion of the St. John’s Convention Centre.
• Several fee increases. For example, the development fee will increase from $1,000 per residential lot to $2,000. This fee will also be applicable to commercial developments. Development fee revenue is dedicated towards growing and maintaining parks, open spaces and playgrounds.
• The city anticipates the Municipal Operating Grant (MOG) from the province will remain the same as received in 2012 at $3.4 million.
For more on this story and reaction, read Tuesday's full edition of The Telegram.
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I have worked in Hospitality industry for 8 years and been a Sales Manager for about 4. Let me tell you, the increase in the accomodation tax will not hurt the industry in St. John's or the rest of Newfoundland for that matter. What is hurting the industry there is Newfoundland's lack of presence in virtually all of the major industry events. As a native, I am shocked whenever I go to an event and see that there is no representative from Newfoundland. The industry will never grow there until this is remedied. The accomodation tax is a standard thing accross the industry and at a comparable rate.