Health tax hitting hard

Municipalities across the Central Okanagan are going to be feeling the pinch from the new Employer Health Tax unveiled by the NDP government during last month's provincial budget.

The tax will be imposed on employers with payrolls of greater than $500,000. It will be set at 1.95 per cent of the employers overall payroll.

It comes into effect in January of 2019 as a replacement for Medical Services Premiums, which are being phased out in 2020.

The City of Kelowna, the largest municipal employer outside Victoria and the Lower Mainland, will have to find an additional $250,000 on a yearly basis beginning in 2020.

The District of Lake Country will have to find an additional $50,000 beginning in 2020.

However, since it will be paying the new tax and 50 per cent of MSP premiums in 2019, chief financial officer Tanya Garost says the municipality will need to secure an extra $80,000 next year.

She says that will amount to a 0.7 per cent tax increase.

"It's pretty substantial, absolutely," says Garost.

Garost is also president of the Government Finance Officers Association of BC, as says members across the province are not happy with the new tax.

"We have been hearing from our members across the province that this is hitting them between and half and one per cent increase for most people," said Garost.

"Many, even the smallest communities tend to have more than $1.5 million in salaries so this is hitting a number of communities."

The City of West Kelowna has not responded to requests for their financial information while Peachland has yet to crunch the numbers.

Other large public employers within the Central Okanagan are also being hit hard.

According to MLA Norm Letnick, Interior Health will have to come up with another $3.3 million annually beginning in 2020, while School District 23 will be on the hook for an additional $1.4 million in 2019 while the board pays the new tax and half the MSP premiums, and $600,000 annually in 2020 and beyond.

The district is saving $700,000 this year as medical premiums were cut in half, and secretary-treasurer Eileen Sadlowski says a decision will be made later this spring as to how to apply those savings as the district works through its 2018-2019 budget.

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