St. John’s eyes 2017 tax decrease

Daniel MacEachern
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Lower taxes, less spending — that’s the plan St. John’s city council adopted Monday evening, as the city promises more transparency on its purse strings in response to sustained criticism since it passed the 2016 budget in December.

Coun. Jonathan Galgay, shown in a recent photo, says the city acknowledges people are not happy with the budge, and council hopes to reduce taxes in future.

“We’ve certainly heard from residential property owners, we’ve heard from the business community,” said Coun. Jonathan Galgay, chairman of the city’s finance committee, after city council’s weekly public meeting. “People were not happy with the budget that was presented last year, no doubt about it. One of the things that we’ve been able to do is come up with some objectives in terms of where we want to go as a council and how we’re going to get there.”

Related stories:

Businesses call for tax relief

Paying more for less

Those objectives include:

• Reducing the residential mill rate (currently 7.8 mills) between 0.3 and 0.5 mills, which would mean a tax decrease of between 3.8 and 6.4 per cent. A similar reduction in the commercial tax rate (25.2 mills) would see a drop of between one and 1.5 mills. Cutting the rate in those ranges would require cutting spending by between $6.6 million and $11 million;

• No spending increases. Funding for a spending increase must be found within the existing budget;

• Maintaining staffing at 2016 levels or lower;

• Increasing capital out of revenue funding available by 10-20 per cent, equating to between $2.7 million and $5.3 million;

• Immediately implementing improvements found during the program review already underway.

Galgay said the 0.3-0.5 rate-reduction range reflects a realistic goal for the city.

“Council ultimately wants to get that down as low as we can, and if we can find more efficiencies, perhaps the number can go much lower in terms of the reduction of the mill rate,” he said. “But we have targets. We have given staff their marching orders. They have undertaken this, effective immediately, and we anticipate that we should be able to reach these targets.”

Nancy Healey, CEO of the St. John’s Board of Trade — in attendance with several other representatives of the city’s business community to present a petition calling for immediate tax relief — called the plan “a start.”

“We’re getting some acknowledgement from council of the challenging budget that they brought down, and the egregious tax increases they had, so there’s recognition there, so we appreciate that,” she said.

Healey said the business community was hoping for a mill rate reduction sooner than 2017 — and the plan approved by council Monday doesn’t commit the city to one then — but Galgay and city staff note provincial legislation prevents council from changing the 2016 mill rate now.

“The talk of maybe a mill rate reduction by 2017, I hope some of my members are going to make it to 2017, so that would be a concern,” she said. “We still haven’t heard anything on the vacancy tax.”

Twitter: @DanMacEachern

Organizations: Board of Trade

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Recent comments

  • Resident
    March 08, 2016 - 13:48

    Who's speaking for the residents. Looks like the property developers got the ear of the City. Vacancy Tax Relief = Higher Residential Taxes. If they want this "relief" it should be spread over ALL commercial properties and NOT be put on the residential taxpayer.

  • guy incognito
    March 08, 2016 - 10:41

    Of course they will push it off til next year. Doc will not be mayor next year. Hopefully most of the current council will be gone next year.....

  • steve
    March 08, 2016 - 10:23

    What a farce.Bribe us with our own money in ELECTION YEAR. My taxes increase was substancial based on the assessment while friends of mine on Barnes road saw only a minor increase in a property that would be worth almost 3 times my own with rental properties attached. This pure B.S ,the whole process. Why was certain areas of this town left unscathed?

  • Wince Collins
    March 08, 2016 - 10:05

    I don't know where the savings are going to come from, they have to find money enough to give the workers another 6% salary increase this year, before they get to decreasing the mill rate. Not to mention what they will have to do after the next assessment and the property value drops about 15%.

  • Sandra
    March 08, 2016 - 09:38

    Could this be because of an election in 2017 for St. John's? Also this do not change the metro bus raise or the business trips (vacation) of the mayor and everything else that the city has approved and continues to approve.

  • Sandra
    March 08, 2016 - 09:38

    Could this be because of an election in 2017 for St. John's? Also this do not change the metro bus raise or the business trips (vacation) of the mayor and everything else that the city has approved and continues to approve.

  • N
    March 08, 2016 - 09:32

    Tax cuts are not deep enough for citizens or business. The goal should be to get the tax rate back to pre-oil boom levels. If that means cutting staff levels, outsourcing for savings, and finding ways to lower salaries then that is what they must do. Everyone else is living in a low oil price reality......time for Council to wake up and join us.

  • Political Watcher
    March 08, 2016 - 09:08

    This is nothing more than posturing; considering that assessments are usually a year behind, next years budget will be based on today's values and seeing that values are down, it will mean taxes will be down also. Galgay is just blowing smoke to try and cover his own incompetence.

  • Bob Hallett
    March 08, 2016 - 08:01

    Not what pretty much anyone in St. John's was hoping for. Does Council think we are this foolish? Next year is a long way away, and such promises are worth nothing. Until we see some real concrete action, this is just useless spin.

  • Jrh
    March 08, 2016 - 07:26

    WOW. What vision, hindsight vision that is! While Mr. Galgay says they will implement immediately it is still too much too late. How about cutting some travel budget things ASAP. I am sure there are lots of other snips they can come up with on their own in parallel with the a big review. ...

  • Ken Collis
    March 08, 2016 - 05:43

    "We have given staff their marching orders." says Galgay. What a joke. The tail wags the dog at city hall.