Tax cut on the horizon?

 Tuesday, 03 January 2012 18:00 Ron SeymourKelowna Daily Courier:

Municipal property taxes in Kelowna could drop this summer for the first time in almost 30 years. A provisional city budget released Tuesday shows a municipal tax reduction of .04 per cent. The last time local property taxes were reduced was in 1983.  "I believe there's a desire on the part of council to recognize the fact that people are just being taxed to death," Mayor Walter Gray said Tuesday.   Council will meet in two weeks to consider the 2012 provisional budget. If approved as-is, the budget means the owner of a typical Kelowna home with an assessed value of $511,000, would pay $1,716 in municipal taxes, virtually the same as last year.   Though a .04 per cent tax cut may not have much practical impact, it's a significant change from the recent trend at Kelowna City Hall. In the last seven years, Kelowna's municipal taxes have increased 19 per cent, double the inflation rate. "Everywhere you turn, it seems that taxes and charges are going up," Gray said. "We're going to do our little part as council to offer people some relief from that trend."  Gray said the previous council, under former mayor Sharon Shepherd, asked city department managers to prepare a provisional budget that provided for a zero per cent tax increase.   "We asked each department to look at the areas where they could reduce their budgets," finance director Keith Grayston said. "They tried to find reductions that would have the least amount of impact."  In his report to council, city manager Ron Mattiussi says a "structural imbalance" had been developing, in which the municipality's revenues from taxation and other sources were increasing at a slower clip than total expenses.   "We have been able to absorb that difference with good planning, grant funding, and a sufficient level of growth," Mattiussi writes in a forward to the provisional budget.   "However, as that gap widens, the traditional ways to deal with a short-term imbalance (reserve funding, debt, a reduction in capital or infrastructure maintenance) are just not sustainable options for the long term," Mattiussi says. Staff have recommended almost $3.3 million in reductions to previously planned expenditures.