Unlike their Tri-City neighbours, Coquitlam residents may not be getting a break on property taxes this year in the face of the COVID-19 pandemic.
On Monday, council will vote on a staff recommendation to move forward with a rate hike of 2.98% on residential properties and 1.98% on commercial properties, the same increase outlined in the financial plan presented in December. Maintaining the increases is necessary, said a staff report, to avoid worsening an already growing budget deficit.
“A tax cut may provide short-term targeted relief, but will also exacerbate the deficits and can prolong a financial crisis as these deficits eventually need to be addressed,” said the report. “As well, local tax cuts directly target property owners but do not benefit a large part of the population, many of whom are renters.”
The rate jump comes as other cities in the area are slashing their property tax hikes. Port Moody reduced its increase to 1.61% last week, while Port Coquitlam residents will not see any increase at all.
However, the Coquitlam staff report noted several measures the city is taking to accommodate residents who may be struggling financially during the COVID-19 pandemic.
The deadline for utility bill and property tax payments has been extended to Sept. 30 and the penalty for unpaid amounts has been reduced from 10% to 5% of the overall amount.
Council is also expected to vote on a recovery plan during Monday’s meeting, which staff said will allocate $5 million from the city’s infrastructure reserve for COVID-19 financial relief efforts.
“Rather than focusing the city’s support only on property owners, the measures being taken by Coquitlam will free up funds for broader Community Support and Recovery Plan initiatives that will benefit all community members and leave the city in a better financial position overall that will prevent large future tax increases,” the city said in a statement to The Tri-City News Friday night.
Local governments are scrambling to deal with the financial fallout due to the current public health emergency.
Projected delays in property tax and utility bill payments as well as a drop in recreation fee revenue following the closures of most public facilities have blown massive holes in municipal budgets.
In Coquitlam, staff are projecting a deficit of between $2.5 and $6.5 million in 2020, an amount the city is expecting to cover with its accumulated operating surplus fund.
The financial impact could be felt well into 2021, according to a staff report.
“The city’s 2020 capital plan is generally in good overall shape to fund the planned capital works for the remainder of the year,” said the report. “However, due to the risk of declining future developments revenues and loss of external grants that are utilized to fund the capital plan, the 2021 capital plan will need to be adjusted accordingly.”