Saint John council backs 3-cent cut in property-tax rate as assessments climb

Saint John city council is looking at a budget for 2025 that would reduce the property tax rate for the fourth year in a row while aiming to improve city services.

A proposed cut of three cents would bring the property tax rate down from $1.58 to $1.55 per $100 of assessed value, according to a staff report on the operating budget submitted to council Monday night. The reduction over the past four years would then amount to 23 cents.

Kevin Fudge, the city's chief financial officer, said the tax-rate decrease is aimed at addressing what he called the "significant burden" on the residential tax class.

"This will partially reduce the residential property tax burden increase from $6.7 million, which is what we get at $1.58, down to $4.8 million, based on a $1.55 tax rate," Fudge said.

Councillors approved a draft of the $194.3-million budget, with one vote against. 

The budget will be brought back to  council for final approvals on Dec. 9.

The reduction in the tax rate is a response to growing property assessments across New Brunswick.

At the end of October, the provincial government announced that the overall assessment base for properties falling within local government or rural districts grew by nearly nine per cent this year. 

Included in this was a 6.5 per cent assessment growth in Saint John with the residential class shouldering the largest share of the increase. The assessment increases are a result of real-estate market adjustments and new construction, the Saint John staff report says. 

The proposed city budget also includes money for a new traffic-calming manager, increases to public transit funding, resources for mowing services and other improvements.

Too much pressure on residents, councillor says

According to the staff report, the coming year's general operating budget is 3.5 per cent larger than the previous budget, with $156 million funded by property tax revenue. 

A bit over $99 million of that property tax revenue would come from residential property taxes.  

The smallest portion of property tax revenue, roughly $14.1 million, would come from heavy industry. 

Coun. Paula Radwan praised the budget but wanted a larger cut in the residential tax rate. She ultimately voted against the draft plan, expressing fears that residents were being squeezed too hard.

"I'm very worried that we could actually price people out of their homes," she said.

"We have to keep in mind that this actually could put pressure on apartment rents going up. So my thought is — in my ideal world — we would be lowering the tax rate by five cents total to try to save this tax burden for people. … I am definitely going to be voting down the budget, but I think staff have done a really good job." 

Coun. Barry Ogden made similar comments but voted in support.

"Homeowners in Saint John are still paying too high of taxes or assessments or the money still coming out of their pockets," he said.

"We've got to find a way when we talk to the province, the homeowners in Saint John can't take anymore high taxes. That's taking away from their groceries everything else."

Mayor Donna Reardon and Deputy Mayor John MacKenzie both praised the budget. 

City continues push for tax reform

Some councillors said they want to see heavy industry taxed more heavily, with more of the revenue being returned to the city. They expressed hope the provincial government led by Premier Susan Holt will follow through on promises made before she and the Liberals won the election in October. 

Currently, municipalities can tax heavy industry and non-residential classes between 1.5 and 1.7 times residential rates. 

Saint John sets commercial and heavy industry rates at 1.7 times the residential rate — the highest allowed by the province. 

This means, while the city's goal is reducing the tax burden carried by residential taxes, non-residential classes and heavy industry will benefit as well.

"Because the current property tax laws pegged the non-residential rate and the heavy industrial rate to the residential rate via multiplier, both those classes will also receive the benefit of lower property tax rates," Fudge said. 

Fudge said the city continues to push the province for tax reform. 

"Which includes requesting the province to transfer the provincial property taxes on heavy industry to municipalities who house those properties," he said.