Municipal Finances and Taxation
As part of our application to amalgamate, the Nova Scotia Utility and Review Board required us to develop five-year financial projections – one for each municipality if amalgamation does not happen, and one for the New Municipality if amalgamation does happen.
Status quo projections used the March 31, 2015 audited financial statements as the base year. The approved 2016 budgets and five-year capital budgets were also used. The projections for the New Municipality combine the financial information from all four municipalities, including capital plans and additional projects that would be possible with support from the provincial government.
The provincial support includes both capital funding and freezing equalization funding at current levels for the next five years, which protects us from an upcoming change expected in the equalization formula.
The projections show benefits of lower taxes for the same or better services, at least $1M in savings each year during the first five years, retaining $5.2M in reserves at the end of the fifth year, necessary capital infrastructure projects can be done in all areas of the New Municipality, and modest long-term debt, well below the acceptable standard for municipalities.
These projections have been found to be a reasonable forecast for the New Municipality by the Nova Scotia Utility and Review Board. External Auditors engaged by the Board indicated that our financial statements were appropriately prepared “and used educated and reasonable assumptions.”
The MOU Steering Committee supports passing these savings on to the residential tax payer. For every $100,000 of assessment the saving is $54.60. To calculate your exact savings multiply your taxable assessment by .000546
Under the Municipal Government Act, municipalities have options for setting taxes to ensure that they are fair and relate to the services that property owners receive. With this authority, we plan to charge separate urban and rural rates. By using a base rate and a user pay approach to specific services, the property tax burden (the total of your tax bill) for rural and urban accounts can be maintained at different amounts and at levels below current day. By establishing new area rates for town fire departments, policing and the retirement of pre-existing town debt, tax burdens can also be kept fair for both the former town and rural ratepayers. There are no additional area rates or charges.
With our financial projections, taxes will be lower for everyone and each property owner will get a fair tax bill for the services he or she receives.