Each household still has to pay the annual hospital levy flat rate of $96.
During Monday’s regular council meeting, the majority of council voted against Coun. Don Mitchell’s motion to change the method of collecting necessary funding for the new hospital from $96 per year per taxable property to a 7.68 per cent increase in property taxes applied equally to all taxable properties. It suggested collecting the funds via the municipal mill rate similar to how other municipal taxes are collected.
“I believe there is a need to stick to a system that clearly lays out what the levy is,” said Mayor Deb Higgins. “Citizens will have an understanding and a knowledge that at a certain point in time it will be removed from their property tax notice once our hospital is built and obligations from the municipality are complete.”
The hospital levy is used by the city to pay off its legislated $18.59 million share of the province’s $100.9 million new hospital project in eight years. According to a report from the financial services department, the levy of $96 per property and each unit of multi-unit residential properties generates $1.54 million per year.
The $96 levy, approved on March 5, 2012, is intended to be collected for eight years from 2012 to 2019 to generate a total of $12.29 million to be used in conjunction with funds already collected to meet the city’s required contribution. Since 2006, the levy had been set at $40.
But Mitchell said the flat rate of $96 per taxable property results in an inconsistency on how the levy is applied. The report stated each property pays $96 with the exception of multi-unit residential properties that pay $96 for each unit. For collecting the $96 hospital levy, the split in the tax base is 94 per cent residential and six per cent commercial and industrial.
“Because we have this formula of 11,500 properties that all pay the same we have extreme distortions in relation to ability to pay,” said Mitchell. “Because commercial properties, which are the larger scale upper end of the bracket much more than residential, are paying the same as a person living in a suite in a fixed income there’s an underpayment from the commercial sector.”
For more information, see an upcoming edition of the Times-Herald.