Dane Gibson
Northern News Services

NNSL (Jun 25/99) - Yellowknife property owners may be in for a tax increase of six per cent in the coming year.

At a city Financial, Legislative and Administrative Committee meeting June 22, councillors approved the committee's recommendation to hike taxes. They will vote on the recommendation at a June 28 council meeting to make it official.

Mayor Dave Lovell said four per cent of the increase is due to the $500,000 tax shortfall the city is suffering because of Giant mine. Two per cent of the hike is due to a drop in property values.

To compensate for a drop in property tax revenue, the city is planning to raise the mill rate.

"If you take $500,000 out of a tax base, you have three choices. You can run a deficit, which is a loser in the long run. You can cut services, or raise taxes," Lovell said.

"At this point, raising taxes is the best option. If we were to cut services, there would be far more complaints from the existing citizens and we'd have a hard time attracting new residents and businesses.

"People come here because it's a nice place to live and because it has good services."

The mill rate is based on the assessed value of the property. Property values in Yellowknife were 2.3 per cent lower in 1999 than in 1998.

"Overall, property values came down due to the reassessment. Even though values have fallen, taxpayers will pay the same amount to receive the same services," Lovell said.

"The mill rate is going up to ensure the city can collect the same amount of taxes."

Lovell, councillors Bob Brooks, Robert Slaven and Ben McDonald voted in favour of the hike. Councillor Cheryl Best said she plans to vote against the motion at the next council meeting.

"This council was elected on promises of no tax increases. Unless it can be proven the city is in dire need, I'll be voting against it," Best said.

She said the city currently has an operating surplus of $1.2 million which is enough to weather the storm created by Giant mine.

"We should be using that surplus to cover our losses this year. The city is not in a bad financial situation," Best said.

"We won't need the tax increase for the year 2000, but if we increase taxes now to cover the 1999 losses, then it's likely those taxes will never be lowered."

She said she would be in favour of adjusting the mill rate 2.3 per cent. Because the mill rate is based on a property's assessed value, she said property owners wouldn't actually be paying more than they did in 1999.

A homeowner, who wished to remain anonymous, said the increase represents another $240 on top of the $4,000 he already pays in property taxes each year. He said that, coupled with high utility bills and a mortgage, is too much.

"It brings me closer to where I'm thinking I'm going to get up and leave town," he said.

"We all knew Giant was going to close eventually. Our elected officials should have been planning for this instead of a double-pad arena."