The City of Kelowna is proposing slashing the tax increase by over half amid the COVID-19 pandemic.
City staff will present the 2020 financial plan to council on Monday, May 4. City staff’s recommendations suggest a decrease in the tax hike from the 4.15 per cent in the provisional budget approved in December, to 2.05 per cent. The proposed tax demand fell from $151.3 million to $148.8 million.
“Difficult decisions are being thoughtfully and methodically made to ensure we can weather this crisis as we simultaneously plan for economic recovery,” said Genelle Davidson, divisional director of financial services. “To reduce the taxation demand for the 2020 final budget, we propose ongoing and one-time cuts to base budgets, the elimination or delay of new positions and programs and the deferral of some capital projects.”
The reduction is predominantly due to capital and operating program reductions in response to the economic impacts related to the emergence of COVID-19, while also maintaining essential services, adhering to contract obligations, meeting previous year commitments and to accommodate growth.
A tax rate of 2.05 per cent means the owner of a single-family home with an average assessed value of $676,100 will pay $2,115, which is an increase of $43 for the municipal portion of their property taxes.
“This tax rate level is one of the lowest proposed rates in the region,” reads the report heading to council on Monday.
Usually, the city receives one-third of its operating costs from property taxes. The change would reduce that number to just 25 per cent. The majority of the city’s operating funds come from things such as reserves and surplus, fees and charges, and borrowing.
“Many things remain uncertain, but readiness, resiliency and recovery are our goals as we navigate this evolving economic landscape,” said Davidson. “We continue to be financially prudent and will adapt by monitoring, planning and making strategic decisions to help us meet the current and future needs of our community.”
Council will review staff’s recommendations on the final budget before its approval on Monday.
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