Some Whitehorse non-profits will pay higher property taxes next year, following a decision made by city council on Monday.
The city says the changes replace a complicated hodge-podge of deals brokered with non-profits with clear and transparent rules that treat everyone more fairly. But groups like MacBride Museum say the result is that their tight budget will be further squeezed, possibly causing service cuts.
Under the city’s new sliding-scale formula for doling out grant money, non-profits with combined revenues and assets under $500,000 would pay no property tax. Those over $500,000 would be eligible for a 50 per cent break on property taxes.
The vote to pass the resolution was approved five to two, following almost an hour of tense debate at Monday evening’s meeting.
Councillors John Streicker and Kirk Cameron went against the grain of council.
They were both in favour of postponing the vote, suggesting administration should go back to the drawing board.
“It’s always tough to work this sort of thing out at this table,” Streicker said.
“I’d much rather continue this conversation in the background. I’d like to recommend that we instruct administration to try and seek alternate solutions.”
Cameron, speaking to council via speakerphone, told his colleagues he wasn’t satisfied with a formula that simply isn’t uniform enough.
He cited the example of the MacBride Museum, which owns its land, and the Yukon Transportation Museum, which is on Yukon government land.
“The tax hits one more than the other,” he said.
The Whitehorse Food Bank, for example, will only pay $15 in property taxes while Softball Yukon will pay $4,780.
Twelve other non-profits, such as Biathlon Yukon, will get full property tax abatement.
Several delegates from the city’s non-profits spoke to council in the hopes of convincing them their new policy was shortsighted. Among them were Nils Clarke and Keith Halliday from the MacBride Museum.
Based on the new policy, the museum – whose assets totalled $769,148 last year – would pay $4,726 in property taxes to the city over the next four years.
“You seem to be making an awful fuss about a small amount of money,” said Coun. Dave Stockdale.
Halliday said it might sound like a trivial number but it’s significant to a non-profit, especially when it hasn’t had to pay property taxes in the past 50 years.
“We don’t think that, since the city had a $3.7 million surplus last year and has almost doubled its reserves to $27 million since 2010, that now is a good time to cut support to a fine community institution like the MacBride,” he said.
The formula would see MacBride fork over $2.70 for every $100 it raises once it goes over the $500,000 mark, Halliday said, adding the tax impact would force cuts to certain museum operations that are yet to be determined.
“It seems to me it’s time to look in the mirror and not tax NGOs that run a lean operation,” Clarke said.
The city sets aside around $140,000 to cover grant requests from non-profits in the city. The past few years the total has been about $30,000 over budget, said Robert Fendrick, director of corporate services.
Under the new formula the city would receive $23,137 in taxes from 11 non-profits.
Mayor Dan Curtis said that sum is important because it goes towards supporting needy organizations.
“We’ve been working on this for two years now and I’ve seen three people come forward tonight, and two of them won’t be losing a nickel,” he said.
“Lobbying is good and healthy but I’d prefer if the lobby groups were more factual. The vast majority of organizations think this sliding scale is fair.
“If the worst hit is $1,000 this year, then that’s not bad.”
Nancy Oakley, executive director of the Yukon Historical & Museums Association, said she supported a policy based on tax exemptions rather than rebates.
But the city doesn’t have the authority to grant tax exemptions, only the territorial government does, said city manager Christine Smith.
Oakley said she is willing to help the city approach the Yukon government to ask them to change their legislation.
Tensions ran high towards the end of the meeting when Streicker initially raised the idea of postponing the vote.
Stockdale referred to the criticisms of the new policy as a “tempest in a tea cup.”
“There’s nothing at stake here,” he said.
“Let’s make a decision and let it run for a year. If there’s a problem it’ll surface and people will be sitting in that chair telling us about it.”
Councillors Betty Irwin, Jocelyn Curteanu and Mike Gladish also voiced their support for the policy, saying it was fair, equitable and transparent.
The new policy comes into effect Jan. 1, 2015.
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