As a storm continues over taxes in St. John's, the mayor is defending the city's budget outside the council chambers.

The budget has been criticized by arts groups, homeowners and business people since it was released in December, although Dennis O'Keefe has largely stayed quiet until this week, when he started doing interviews. 

'We realize that the property tax is unfair … but we're stuck with it.'  - Dennis O'Keefe

"When you're facing budget reductions it impacts on everybody," said O'Keefe, who had wanted to wait to speak until city officials met with the Board of Trade. 

The business organization has condemned the city's fiscal plan, saying the tax increase would threaten the viability of some businesses.

O'Keefe describes the budget as being "for the future financial health of the city."

"The best one can do is ensure that it's a broad-based impact so that one particular group is not in the position of being impacted too adversely while another is not impacted at all," said O'Keefe.

Unfair Increase

Many downtown business owners say the budget has increased their taxes to obscene amounts. 

Melanie Caines, who runs Nova Yoga on Long's Hill in downtown St. John's, said her taxes have increased by $2,000, which describes as an exorbitant hike for a tiny business with limited revenues. 

'It feels like they're punching you in the gut and spitting you in the face.' - Melanie Caines

"It's completely ridiculous, it's unfair ... you feel like you're being punished," Caines told the St. John's Morning Show.

"It feels like they're punching you in the gut and spitting you in the face."

Caines said she's had to cut back on staff hours, but doesn't want to increase client fees to make up for her increased costs.

While she says her business does fairly well and she's thankful to be able to do what she does, the city needs to understand that this affects everyone not just the business.

"Maybe prices are going to increase, maybe your favourite local business is going to have to shut down because they can't survive this," Caines said.

"I don't pretend to know how to run a city but in my mind you don't give yourself a raise, hike taxes and cut services ... it's rude, it's dirty, and it's disrespectful to the people who voted you in and had faith in you."

downtown st. john`s

Some business owners have seen increases property tax increases of over $10,000 dollars. (CBC)

Bottom line

While O'Keefe said he understands that businesses have concerns, he said they may not see any tax relief.

"We realize that the property tax is unfair, that the property tax is aggressive, that the property tax is inequitable, but we're stuck with it," said O'Keefe.

He said the money had to come from somewhere in order to maintain services, and it's not council's fault most revenue comes from property taxes. 

If anyone has a problem with their property assessment, O'Keefe said there's a process put in place by the province to challenge it or find out how the amount was assessed, and people should use it. 

He added that the city has received around 1,300 appeals, which is only up slightly from around 1000 during the last round of assessments.

The city plans to have discussions with businesses, and if there is anything that can be done, O'Keefe said they'll keep an open mind but businesses also have to understanding of city issues.

"Again, I have to say that we have a budget and the bottom line of the budget will be maintained ... As reasonable people we should be able to work through that process."