Moose Jaw residents may want to brace for a large tax increase proposed by city administration for the 2023 budget.
During a budget update on Monday, director of financial services Brian Acker said the city is looking at a deficit of $690,000 in 2023 which would equate to a 2.1 per cent municipal tax increase. This is also before any increase for the Moose Jaw Police Service.
Acker said external factors include a modest real Gross Domestic Product growth of 2.4 per cent, stable employment levels, stable housing starts, modest home price increases and decreased home sales.
“All of those external factors do have an impact on the City of Moose Jaw. It impacts how much revenue we generate, impacts the costs that we pay obviously for our goods and services,” Acker said.
According to Acker, some of the local factors include building permit activity is expected to remain high and major industrial and commercial development projects are expected to continue. Due to these major projects, the city is projecting over 600 new jobs to be created in the next five years.
“The more jobs you have, the more people live in your community, the more houses they build, the more taxes they pay, the more services they use, the more small businesses that start up, so that's really a driver in terms of our overall budget process,” Acker said.
Other financial factors the city looked at is an assessment growth of one per cent which is expected to bring in an additional $328,000 in taxation.
“(It) is a good positive growth compared to a lot of our previous years where we've headed in the 0.1, 0.2, 0.3 per cent range. So certainly, one per cent is a positive,” Acker explained.
Bank interest rates are expected to bring in about $100,000 and parking penalty revenues should bring in an additional $300,000.
The city received some good news that the municipal revenue sharing will go up $828,000 next year.
The city will see inflationary growth when it comes to salaries and benefits, as the city is estimating inflation at three per cent. Finally, one-time equipment and solid waste contribution of $665,000 from the 2022 budget will no longer be available.
According to Acker, the city continues to have expenditure pressures for projects such as the Fourth Avenue Bridge Rehabilitation, the new outdoor pool and $74 million in waterworks projects.
Moose Jaw receives about $2 million per year in gas tax funding that goes directly to waterworks for additional projects.
Other grant funding is another factor when it comes to the city’s finances. The city has been successful in getting any large grants at this point but is continuing to apply.
Finally, additional funding for the Buffalo Pound Water Treatment Plant Renewal project will put pressure on utility costs.
“Additional cost of that borrowing will be about seven per cent in terms of a rate increase that would be spread over time obviously but it does have pressures on our utilities. Last year we landed in the three per cent range for annual increases. This will add to that pressure going forward,” Acker said.
An online budget survey is expected to be released in the coming weeks for residents to give their opinion on priorities for the budget. In November, the administration will release its proposed budget and council deliberations will begin in late November or early December.