The City of Kelowna has slashed the proposed tax rate by over half the initial amount in light of the economic hardships caused by the COVID-19 pandemic.
The city’s final 2020 budget was amended and approved on May 4.
The now 2.05 per cent increase — down from the December-approved provisional budget’s proposed increase of 4.15 per cent — will see the average homeowner pay an additional $43 in municipal taxes. The provisional budget would have seen that number doubled, at $86 more per average household.
The tax rate cut means the city will reduce planned spending for new capital projects, defer or eliminate new positions and reduce operational budgets across city departments.
“This year, the annual budget prioritizes keeping the taxation demand as low as possible while ensuring we can maintain essential services and continue to invest in important projects that will make a difference for our residents,” said Genelle Davidson, divisional director of financial services. “We are taking action to support our residents where we can as we work towards financial stability and eventually, economic recovery.”
The city’s net 2020 operating budget is $148.8 million — down from the provisional budget’s $151.3 million. General municipal taxation in 2020 will account for 25 per cent of the city’s total revenue.
Usually, the city receives one-third of its operating costs from such taxes. The majority of the city’s operating funds come from things such as reserves and surplus, fees and charges and borrowing.
“The final budget this year is like no other budget in Kelowna’s history,” said Davidson.
Mayor Colin Basran said the financial turmoil of the COVID-19 pandemic will be felt for years to come and it’s not something that can be fixed in a single city budget. He anticipates this will affect the city’s budgeting decisions for the next few years.
“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.”
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