Saint John's finance committee not counting on tax growth
Draft budget for 2017 projects no added revenue from property taxes
Saint John could be facing its fourth year of near-zero growth as city council prepares its 2017 operating budget.
The city's finance committee is operating under the assumption there will be no increase in the tax assessment base for next year and no increase in the annual equalization grant from the provincial government.
There are also no plans to increase revenue by raising the property tax rate.
The $153-million draft budget prepared for council's review includes a tiny, 0.96 per cent increase, attributed to a carry-over surplus of $416,000, and a bump in fees collected from building permits.
"It's a tough, tough budget," said Coun. David Merrithew, who chairs the city's finance committee.
"We've seen it for the last number of years that we've had to cut goods and services."
Merrithew said the city has no options but to cut in such areas as paving and vehicle purchases, because labour costs continue to grow even as revenue growth stalls.
"It can't go on forever, we know that," said Merrithew.
"It's not mathematically possible."
Saint John's assessment base grew 1.53 per cent in 2016, but the $1.8 million in potential added revenue was offset by a cut to the province's community equalization grant.
The Department of Environment and Local Government is expected to release its assessment figures for 2017 within days.
Home sales stronger
But Sheila Henry, the head of the Saint John Real Estate Board, is hoping strong October sales, matching the highest rate in the past seven years, is a sign home prices are starting to move upward after a long lull.
"Our average price actually for the previous four years to 2015 was almost spot-on every year. It was very stable every single year," said Henry.
"So this year it being up 3.4 per cent is good."
CMHC's most recent housing market outlook is projecting only a "slight increase" in average sale prices in the Saint John region in 2017, and that will be driven by "hotter markets" in Rothesay and Quispamsis.
"The basic gist is that prices are flat and sales are up," said Michael Edwards CMHC's senior market analyst for New Brunswick and P.E.I.
"Short term changes in the average resale price don't always mean that there's an increase in the average assessed price."