Fredericton mayor wants city to keep larger portion of its property tax revenue

Fredericton's mayor says the way the province collects and redistributes non-residential property tax revenue is non-transparent and isn't letting the municipality keep as much money as it should.

At Monday evening's council meeting, councillors voted to forward a letter signed by Mayor Kate Rogers to the caucus of MLAs from ridings in and around Fredericton.

In the letter, Rogers acknowledges the provincial government is embarking on a review of the way it collects non-residential property tax revenue and redistributes it to other communities across the province in what are known as community funding and equalization grants.

But she criticizes the way it's currently done and tells the MLAs that the outcome of the review could present either an opportunity for more tax dollars to stay in their communities, or a risk that fewer tax dollars do.

"The commercial tax base collection and community equalization funding distribution in its current form both unfairly and unreasonably burdens the [City of Fredericton] and other jurisdictions," Rogers writes in the letter.

"Given the White Paper's recognition that local governments require additional revenue sources, we are requesting that a larger portion of the non-residential tax base collected by on behalf of the [City of Fredericton] be transferred to and effectively retained by the [City of Fredericton]."

Fredericton's non-residential tax base has an overall assessed value of approximately $2.2 billion, which generates about $79 million annually, consisting of the municipal portion of the tax rate and the provincial portion, Rogers said.

The province generates about $30 million in revenue from those properties, of which less than $2 million is returned to the City of Fredericton in a "core funding grant," she said, adding that the difference is used for other provincial priorities.

Rogers also said the city is concerned that its growing responsibility — as is the case with other urban centres — to support vulnerable populations is "becoming an unfunded mandate."

"We request that the review and modernization of the equalization grant formula account for this discrepancy and increasing cost burden," she said.

"Further, funding should be directly allocated to urban centres in lieu of solutions that direct funding to municipalities through the [regional service commissions]."

The letter is addressed to Fredericton West-Hanwell MLA Dominic Cardy, Fredericton North MLA Jill Green, Oromocto-Lincoln-Fredericton MLA Mary Wilson, Fredericton-Grand Lake MLA Kris Austin, New Maryland-Sunbury MLA Jeff Carr, Fredericton South MLA David Coon and Fredericton-York MLA Ryan Cullins.

Speaking after the council meeting, Rogers said she hopes the letter gives the MLAs an understanding of what her concerns are and that they collaborate on changing the equalization model so that it's more transparent and fair.

"We're not, we're not advocating or lobbying for anything in particular other than the fact that this does need to be completely modified," Rogers said.

"And we do need to be able to rationalize it to ourselves, to our taxpaying constituents, and to just to explain where their money goes."

Vicky Lutes, spokesperson for the Department of Local Government and Local Governance Reform, said the goal of the community funding and equalization grant is to provide funding so that local governments can provide a comparable level of service at a comparable tax rate no matter where they are located.

"A new grant formula will be created to ensure communities that need support receive adequate funding, while those that are financially stronger are not recipients of equalization funding," said Lutes, citing the government's white paper on local governance reform.

In May, the province announced a new expert panel will study the current system in New Brunswick and make recommendations on how to improve it.

The two-person panel comprises Nora Kelly, a former provincial civil servant and deputy minister, and Pierre-Marcel Desjardins, a Université de Moncton professor whose area of expertise is economics and local government, according to a news release.

Desjardins and Kelly will present recommendations for a new system of fiscal transfers to the government in September.