Sidney will dip into a contingency fund to cover a loss of taxes from the industrial businesses in the west part of town.
Town council had planned on increasing its light industrial tax rate this year and in 2014, bringing it in line with the municipality’s commercial tax rate. That would have brought in an extra $40,000 to this year’s town budget.
A group of industrial businesses complained, however, and after meeting with town staff and councillors on April 8 and 10, cut the impact in half.
Mayor Larry Cross says instead of phasing in the tax hike over two years, the town and West Sidney Industrial Group agreed to spread it out over four years.
While that means an estimated loss of $20,000 in this year’s budget, Cross said the town can make up the other 20 grand out of one of council’s annual contingency funds.
“Part of this was their concern of the tax hit,” said Cross.
For the last four years, industrial businesses on the west side of Highway 17 in Sidney have enjoyed a lower-than-average tax rate. Town staff asked that council approve correcting that inbalance in 2013 and 2014, bringing the industrial rate in line with Sidney’s commercial rate. That would still leave the industrial rate as one of the lowest in the capital region.
Those businesses, however, approached council concerned that a tax increase comes at a bad economic time. At council on April 8, they asked to negotiate further with the town and council agreed to do so.
From a meeting between both sides of April 10, it was agreed to phase the tax rate in at a clip of 25 per cent per year for four years. With the town’s overall tax rate increase set at 2.93 per cent in 2013, that meant a loss in revenue. Cross said that’s where the contingency fund came in handy.
He noted that this will not drain that contingency, which exists to help pay for unexpected costs to the municipality.
It was last used, said Cross, to pay for a storm-and-erosion-damaged waterfront walkway last year.