Dropping revenues creating a challenge for towns

Shrinking government grants and increased costs mean higher taxes.

Unconditional grants to the Village are going down and user fees for the new water treatment plant are going up in the Village of Ashcroft’s most recent budget.

Less than two dozen people gathered at the Ashcroft Town Hall meeting where the town’s current budget was presented on May 4.

Ashcroft is only planning a 2.5 per cent rise in taxes this year, but Chief Financial Officer Yogi Bhalla warned that keeping tax increases to a minimum are getting harder when provincial and federal grants are getting smaller and the tax base is getting older.

He said two-thirds of Ashcroft’s population is expected to qualify for the seniors discount in 10 years, and that will mean significantly less residential tax revenue for the Village. Many municipalities have phased out the seniors discount for that reason, he said.

Unconditional grants from other governments account for $883,239 of Ashcroft’s total revenue of $3,826,256, but are not guaranteed. Bhalla said some years they are more than others, but they are never guaranteed. It’s a problem for small municipalities all over the province, he said.

The Village uses these grants to offset tax increases, said Bhalla.

“Day to day needs are essential,” he said, “and the unconditional grants help us pay for those things.”

A large part of the Village’s expenses are driven by gas and electricity rates which they have no control over.

“The population goes down, but expenses don’t,” said Ron Hood. “How are you accounting for that?”

“By making an economic development plan,” said Mayor Jack Jeyes. “It will give us focus.”

The town is preparing to build a new water treatment plant for its drinking water in the near future, and will be increasing the user fees it collects in anticipation.

Providing approximately half a million dollars in revenue to the Village, Bhalla said the fees have remained the same for many years, but that is about to change.

“By raising the user fees, it will create a surplus for water purposes,” said Coun. Al Mertens who attended the meeting along with Mayor Jeyes and councillors Barbara Roden and Doreen Lambert.