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Economy won't affect local taxation

by - Story: 43261

Kelowna taxpayers won't necessarily get a break on taxes, despite the recent downturn in the economy.

Director of Financial Services, Paul Macklem, is in the process of preparing the 2009 municipal budget.

The documents will be complete before Christmas, however, council will not get a chance to debate the budget until January 7.

Normally, budget deliberations take place in December, however, during election years the process is delayed a few weeks while new councillors are brought up to speed on council responsibilities and procedures.

Despite the economic picture, Macklem says there is a level of service taxpayers expect.

"Our role today is to put together a budget that represents the cost of whatever services are anticipated and may or may not be required from council's perspective. It would be up to council to then decide whether the level of service is something they wish to proceed with relative to the taxation and cost impact," says Macklem.

During the recent Citizen Survey, conducted prior to the downturn in the economy, about 60 per cent of Kelowna taxpayers said they would prefer maintaining current service levels and current tax levels.

A survey taken during the recent election campaign also found a majority of residents favour maintaining taxation and service levels while nearly half also support raising taxes for road infrastructure.

"From a staff perspective, what we have not wanted to do is panic in the throws of where the economy is today. If this turnaround happens very quickly, we wouldn't want to make the kinds of moves that could put services in jeopardy."

Macklem says, regardless of the economic climate, infrastructure is not something that should ever be compromised.

"We shouldn't be taxing hard when times are good and not taxing when times are tough. Leaving your infrastructure not maintained properly will bite you in the long run. It is important to keep that up."

He says in times like this, it's the luxuries that are cut out, not the necessities.

"It's hard to believe we would embark on it (Mission Aquatic Centre) if it were up for discussion today. In the end though, it's up to council."

In 2008, Kelowna taxpayers were handed a 5.66% budget increase. Nearly half of that increase, 2.9%, was directly related to the $44 million Mission Aquatic Centre.

The 2009 budget will begin with a tax hit at 1.71% related to the Mission Pool along with annualized cost from 2008 for RCMP and transit construction.

In 2008, the provisional budget included an increase of close to 7% before council pared that down to 5.66%.

Macklem adds Canadian cities are much better off than some U.S. cities during tougher times due to the way taxes are collected.

"We don't rely on local sales taxes. So, when you get hit by a downtown, it's not quite as devastating as many American cities."

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