Saint John councillor urges city to increase borrowing

Coun. John MacKenzie says city is in 'rough spot' as it tries to find $5M in savings

CBC.ca
Dec. 1, 2015
By Connell Smith

Saint John Coun. John MacKenzie says the city may have to increase borrowing to avoid slashing services or raising property taxes.

MacKenzie's warning comes as councillors grapple with reduced provincial grants and a deficit resulting from cleanup costs following last winter's unprecedented series of snowstorms.

In all, MacKenzie says councillors are trying to find close to $5 million in savings going into the 2016 budget year.

"We'll do what we have to do but I think we're going to end up borrowing some money to get through this rough spot," said MacKenzie.

MacKenzie says council can transfer less money from the operating budget into the capital budget. The additional funds required for such things as road reconstruction and vehicle purchases could then be borrowed.

A draft version of the $21.8-million capital budget has not yet been passed by council. As it stands, city managers are recommending $11.8 million of that total be funded through borrowing.

On the bright side for the city's coffers, Saint John's tax base grew by 1.5 per cent after a nearly flat 0.5 per cent increase last year.

But that potential $1.8-million increase from property tax revenue was immediately offset by a $1.01 million cut to the community funding and equalization grant, which was formerly known as the unconditional grant, transferred to the city by the provincial government.

Tax level on industry challenged

"It's not sustainable," said MacKenzie.

"We need fair taxation in this city and industry has got to step up to the plate."

MacKenzie is referring to a property tax relief program for New Brunswick businesses introduced by the former Alward government. He says the provincial government is now trying to recover that money from municipalities.

"They're trying to find $600 million in the province, we're trying to find $5 million here in the city, it's just not working out," he said.

In the meantime, Saint John councillors are holding a series of closed-door sessions to try to hammer out the 2016 operating budget.

Coun. Bill Farren says the budget could lead to cuts to city services.

"Everything is on the table," said Farren.

"We're reviewing everything that we have to to come out with a balanced budget. And that could mean services, it could mean a number of things."