by Glenn Taylor
Northern News Services

INUVIK (Feb 14/97) - The town finance committee is struggling to produce a new budget for the town that avoids tax increases, at a time of shrinking revenues and ballooning costs.

The town's new fiscal year began last month. But the new budget won't be ready until at least next month, according to town finance committee member David Connelly.

What's the holdup? A number of things. A new council and the resignation of key finance employees (the treasurer and town financial officer) has delayed the budget process. As well, a new comptroller has been hired by the finance committee to help arrive at a budget by March.

In the meantime, the town is operating day to day, its departments spending money without any clear direction of how much there will be to spend over the coming fiscal year.

This year will be a very tough budget for the committee. Council has in the past few years kept taxes flat, but this year might be a different story. A motion raised by Connelly a few weeks ago in council to oppose any new taxes in the budget was defeated by the majority of council.

Council may be worried that it can keep the lid on taxes this year. Operating costs are up, and tax revenues are expected to take a dip, thanks to a shrinking economy and population. The town employee contract is up for renewal, and workers are asking for a three-per-cent raise.

Meanwhile, the NWT Power Corporation is looking for a rate increase, while block funding from Municipal and Community Affairs is down about five per cent. "These numbers are not going the right way," said Connelly.

Operating costs to the new Inuvik Centennial Library were three times over the figures budgeted last year, said Connelly. And what will the operating costs be for the new recreation complex? That's a virtual unknown at this time, said Connelly.

A draft budget produced two weeks ago asked for a one-per-cent mill rate increase, from 17.81 to 18.81. On a $100,000 house, that would be an increase of $100, from $1,781 to $1,881. Connelly said that wasn't acceptable, and the committee has decided to revisit the budget to see whether more savings can be extracted from departments.

"The financial committee and the town departments recognize that times have changed," said Connelly. "Departments are aware that things are no longer the same, that they can't expect a one-per-cent increase every year like before."

He said the departments agree that cuts must be made "across the board" to capital and operations and maintenance. Where the groups lack agreement is on wage and salary costs, and the coming contract renewal for workers.

Connelly said a three- per-cent increase to salaries might be difficult for the finance committee to accept in these times.

"My hope is that we can produce a budget that offers a small tax decrease or at least no tax increase," said Connelly. With a seemingly endless string of obstacles ahead, the finance committee will have to make some very difficult decisions before the budget is released.