Estevan City Council approved the 2014 general operating and capital budgets during the April 28 meeting, and they also authorized a large property tax increase for local residents for the second straight year.
The general operating budget has about $25 million in expenses, and while the capital budget has another $4.86 million in projects.
But to pay for the projects and expenses, council had to increase the mill rate by 1.8 to 11.8, which will likely generate more than $2 million. Last year the taxation rate went up by two mills.
According to a report from City manager Amber Smale, the increase means that the property taxes for the average home, with an assessment value of $280,000, would be $1,552, which would be an increase of $164 from the previous year.
It's still one of the lowest rates in the province, Smale said.
Mayor Roy Ludwig said a second straight mill rate increase was needed to bring the taxation rate to a more reasonable level.
"We went too many years without raising the mill rate, and now we're paying the price," Ludwig said. "We're hoping, after this second increase, which is a fairly large increase … that we can go back to more reasonable increases in the future."
It's never easy to raise taxes by so much, Ludwig said. He would prefer to see small, incremental increases, similar to those approved by recent councils, and he hopes the next year will signal a return to smaller tax increases.
There won't be any significant capital projects for the general fund departments, Ludwig said. Rather, the money from the mill rate increase will go towards completing capital projects from previous budgets, and to paying down about $5 million of the City's debt, which is now above $37 million.
"Moving forward, we'll be looking at more infrastructure projects," said Ludwig. "We have King Street that we have to look at down the road, and some of the crumbling areas of the city as far as the roadways go."
During the meeting, Estevan Chamber of Commerce executive director Michel Cyrenne peppered council with questions that had come from the local business community about the tax hike.
Cyrenne and the business owners want to see Estevan's commercial and industrial property tax rates remain among the most competitive in the province.
But council members, particularly Councillor Dennis Moore, who is a retired entrepreneur, said homeowners shouldn't be subjected to a large property tax burden. Moore is particularly concerned for senior citizens.
"Let's not forget the person that only gets so much money a month," said Moore. "Every time we weasel in, and chisel in and take a piece of it, that's a piece they don't get back."
Cyrenne countered that a lot of business owners don't get a fair return on their property taxes, because they're situated on gravel roads, they don't receive garbage pick-up, and they're not hooked up to the City's septic system.
As for water rates, council has yet to finalize them, but there will likely be an increase of five per cent to eight per cent in 2014.