NB Telegraph-Journal | Saint John
As published on page B1 on December 12, 2005
Mayor says tax hike last resort
Council to deal with pension fund shortfall tonight
Click to zoom McFarlane
By David Shipley
Telegraph-Journal
Dealing with the city's pension fund woes will be a major focus for common council when it meets tonight.
Mayor Norm McFarlane says council will explore all options - including an increase in the city's property tax rate to deal with the issue.
The city needs to address the pension plan issue before dealing with next year's budget, he said.
"I want it done before budget," Mr. McFarlane said.
The budget should be completed in early January, the mayor said. That gives the council a little over a month to address the four-year-old pension fund problem.
Mr. McFarlane said he is reluctant to raise the tax rate because council had to raise the property tax rate by four cents last year to pay for items from previous years' budgets.
"My absolutely last resort is a tax increase," he said.
He admitted though, that given the amount of money the city is dealing with in the pension plan problem, council may have no choice but to raise taxes.
"If it has to be, it has to be."
City staff has warned the council that the pension issue could mean either a six-per-cent rise in property taxes or a major cutback in city services.
Another option is the possibility of borrowing the money and adding to the city's long-term debt.
However, Mr. McFarlane said many options were "within reason" because the pension issue has been going on since 2001.
The fund is more than $44 million in arrears and in the next year the city will be required to pay down $11 million of the liability. Actuarial experts say the fund does not have enough money in it to meet the future needs of city workers who retire.
The pension fund's shortfall is the result of an 18-month stock market dive in 2001 and 2002. The city put off dealing with the issue in the past two years and the pension plan deficit is $11 million.
The city's entire yearly operating budget is about $100 million.
Any solution council comes up with for the pension plan will have to be more than a short-term answer, aid Mr. McFarlane.
"What we do for the pension fund will have to look toward the future so this doesn't happen again and another council isn't faced with this in the future."
8 comments:
Charles, Once again you're being an outlet for people to Voice their opinion and Vent :
Your darn right I think there will be a Voice Uproar War { peaceful } complaining.
I have a great respect for the Saint John Police Department, they serve and protect, and place their lives on the line 24/7 365 days a year.
But did the City of Saint John have to buy 2 New Harley Davidson Motorcycles which cost, and this was in the news, $44,000,00 ?
Since the LNG deal was shoved down our throats, our wonderful elected City Officials accept { and I'm being sarcastic with this example } $10,00 in Taxes for this operation instead of Possibly 5 Million ?? What is happening here.?
I have a house and a small piece of property, and if the Tax Rate does indeed go up, my House is going up for Sale, and I'll be heading out to the Rothesay And Quispamsis area, even though all my friends live here in the City.
These people at Saint John City Hall, have just gone 150% Nuts. And the other thing is, Taxes keep going up, and the City Services keep decreasing and vanish if not all together.
Maybe it's just me, and I'm all Wrong, and if so, I'll be the first to say I was wrong. I hope some of your other readers will voice their opinion's on this Blogged Story.
44 million in arrears, wouldn't year one of the LNG have dealt with that?
the city is going to be negotating a water deal with the Irvings,, why not charge them the $5 million that they gave away on the LNG deal? that would take care of the pension fund and leave us poor people alone to enjoy our homes instead of taxing us out of our homes and the city .
FYI
This is one of the reasons that the rents are so high in NB. Poor
tenants
are paying higher taxes than home owners in actual fact.
This document has been presented to the province of NB by the
Apartments
owners association and they are not committing to do anything about it.
So once again our poor citizens in NB are being stuck with a huge tax
that
is not fair.
The way to solve this issue is to get a successful businessman as Mayor & that person will sort out any financial problems the city may have.
Hey, wait a minute! Michelle Hooton professed to be a "very" successful business woman........why not get her to look after problem with the pension deficit?
Problem solved! No need to raise taxes! LOL!!!
Ouch :
That last suggestion really Hurts, { as in a good joke }
Things are bad enough. Let's not make them worse { lol }
It just sickens me when I think back to before the LNG Deal they knew the city was in need of municipal dollars. The pension problem effects everyone because the average taxpayer also lost some money but no one will pay our lost funds back. Another problem the city had was buying out pensions to allow city employees to retire early; that comes with a price - just check into the deal Fire Chief Tait received; Mr Tait should of worked until 65 like the rest of us have too. Now he is on the pension board and receives a pension and a cheque as a councillor who also enjoys the trips at our expense that come with be on the pension board and other positions. Great life for some.
Some of us are just trying to make ends meet while they juggle the numbers around. They knew before the LNG Deal that the city was short of money but they still decided a Billionaire deserves more respect then the people of Saint John. This is criminal when Lord passed a Bill to allow the city to not collect the taxes.
Soon money will be needed for new water and sewerage and harbour cleanup; hopefully they charge the billionaires what they should be charged to help pay for the infrastruture. They don't need another deal and they pollute more then the rest of us.
In one day they use more water then all of Fredericton does in one day. No more Deals for the wealthy Irvings, please.
Saint John Energy is what most Saint Johner's use for electricity and Irving uses NB Power for their power; they don't help pay any costs or bills at the rate they should pay. Shame on them to still be whining for Deals while the rest of us struggle and are hurting badly. Saint John wants a Deal for regular taxpayers this time!
Saint John does need a break for the people who have tryed to hang on for so long. Who knows where this extra gouging of the people will go or what state this will put the people in for years to come. Pension fiasco, Water Rates, water and sewerage infrastructure, and so many more problems that are not public.
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