ERIN – The second iteration of Erin’s draft 2024 budget, presented to council during a special meeting on Dec. 6, started out with a proposed 5% tax rate increase.
Half an hour later, the rate increase had dropped to 3%.
That’s down even more from the original rate increase of 8% proposed on Nov. 23.
According to a detailed report from town treasurer Wendy Parr, changes to the town’s capital budget included deferring new vehicle purchases, the design of a multi-use recreational facility and rebuilding a wall at the Lang Cemetery.
There were also decreases in the estimated costs for road surface treatments and a traffic impact study totalling $200,000.
Operating budget changes included staffing in roads and parks and recreation departments.
“All of us are living with unprecedented inflation rates,” Parr said, adding the town has “worked hard” to balance an increase against current services provided to residents.
On Wednesday, councillor Bridget Ryan said the proposed 5% rate increase was still too high.
“How can we justify this to our taxpayers?” she asked the treasurer, pegging inflation at 3.5%.
“It is down at the moment,” Parr conceded, before saying “costs have increased significantly, and those costs are not going to be going down.”
She also said inflation needs to be considered year-round, not just in the moment.
Councillor John Brennan motioned to move $160,000 from the town’s tax rate stabilization fund, to further reduce the increase.
“I think that’s a lot more palatable for our taxpayers and still leaves the fund in a fairly healthy position at a little over $1 million pending future surpluses which we may devote to that,” Brennan said.
Councillor Jamie Cheyne backed Brennan’s idea.
What about the “risk” associated with the move, councillor Cathy Aylard asked.
“The taxes collected are lower, and that carries forward to the following year,” Parr cautioned.
“When you’re calculating the following year’s tax rate, you compare it to the previous year’s tax collected,” she explained.
“So it just pushes the rate (increase) forward to another year; there would be a (later) increase because of keeping it low in the current year.”
With Ryan abstaining, council voted to move the funds anyway.
Ryan later told the Advertiser she wanted to see less money coming from the reserve, and more being cut from the operating and capital budgets.
With the draw on reserves, the current budget proposes an additional $235,757 to be raised through taxation, bringing the total 2024 tax levy to $8.34 million, resulting in a 3% tax rate increase.
The total overall budget, including the cost of government, services to residents and infrastructure, is pegged at $14.6 million.
Comparatively, this year’s budget was approved at $13.82 million.
It’s anticipated council will address the draft budget again at its Dec. 14 meeting, but save for any unforeseen changes, it’s likely the budget will pass very close to its current form.
