Finance Committee Meeting Today at at 2 !!

The Finance Committee will be discussing the 2.7 option today. This is the option that the Finance Department was asked to calculate as one of the possible BUSINESS TAX RATIO and is the lowest one proposed so far. The other 6 ratio possibilities remain on the table. (These are 3.05, 2.96, and 2.8 with a two year phase in and 3.02, 2.93 and 2.77 with a one year phase in)

The new 2.7 option will roughly add $110,000 to the RESIDENTIAL CLASS TAXES to total $385,000 in the 2 year phase in option and $77,000 to total $352,000 in extra tax load to the Residential Class.

There are other ways that the Business Tax could be lowered without just sticking in to the Residential Taxpayer. The Manager of Finance has presented his options. It is up to council to decide upon these possibilities. However there are other monies and considerations that should be looked at before the decision is made:

• There is $70,000 in Grants in lieu of taxes for BC Hydro (an Utility) that is not part of the above calculations. (probably only $30-$40,000 would be more accurate.)
• Furthermore there will be a rather large increase in this category when the 21.7 million Control Centre comes on line in 2008 (Hopefully). This money in excess of $400,000 may help lower the Business tax ratio.
• The excess profit from the Airport (A business) (estimated at least at $90,000 ) could be used for business tax ratio adjustment if it is not dedicated to the Airport reserve account if taxiway Charley is agreed to be built in 2007.
• Last years surplus estimated at $700,000 before the budget adjustments where it was decided to pay for the OCP review $230,600 from the existing $700,000 in 2006 operating surplus. This leaves only $469,400 (700,000 - 230,600) in the 2006 year end surplus (approx.) for the council to slice and dice. This could be used to lower the business tax ratio WITHOUT resorting to increasing the taxes extracted from Residential Property owners.

Don Quixote Recommendation: (If I Was KING)

• Phase in Utility Tax Ratio to 6.5 for the 2007 tax year.
• Phase in Lt. Industrial Tax Ratio only to same level as business tax ratio and stop. (i.e. Treat Lt. Industrial as a business) Do not proceed to the 3.2 intended TARGET ratio for this class. Resolve to treat the Lt. Industrial class in the same way as you treat the business class in the future.
• Signal to Business and Lt. Industry by Resolution that the tax windfall that comes from the new Control centre will be utilized to lower their tax ratios in future years.
• Use some of the monies suggested above to make these changes without resorting to increasing the residential taxpayers class BURDEN.
• Lower the Business Tax ratio to 2.7 in 2007 if above conditions are met.
• Kickstart the DVA or Chamber of Commerce by signaling that you will bring a resolution to UBCM to increase Property Tax exemption for Businesses from $10,000 to a higher amount (say $50,000) IF THEY LOBBY YOU FOR IT. (This tax change if implemented would not change the Amount of monies required from the Business Class at tax time, but would more efficiently change the distribution of tax load and benefit the smaller local businessman at the expense of the larger external conglomerate. (Banks, Walmart etc.)