A nine per cent increase in Merritt’s residential property values will not necessarily result in a surplus of funds for the City of Merritt.

Over the coming months, council will put into place the 2019 budget, and the tax rate will determine whether the city receives a revenue boost.

“If we left the tax rates the same it would mean we would be collecting more money from the residential properties, because that is where the major increase has come in,” said Sheila Thiessen, the city’s acting chief administrative officer. “Council can choose to either lower the rate and keep the actual tax bill the same, or they can take that and use it as extra money. It is hard to say anything at this point because it is really up to council.”

City staff were not relying on property assessments to go up substantially when they created the 2018 budget, Thiessen added.

“We usually budget for a minor — one to two per cent — increase year-to-year, but we were not expecting a nine per cent increase for sure.”

Another boost for the city this past year was new construction and development, valued at just over $10.5 million dollars, said Graham Held, deputy assessor with BC Assessment.

“Last year was just under $4.5 million dollars,” he added.

That said, Held cautioned this bump is offset by a decrease in the city’s major industrial tax base.

“With the closure and the demolition that was started at the Tolko plant the city is going to see their major industry tax base continue to decline. And in this case it is to the tune of almost 3.8 million dollars,” he said.

Revitalization tax exemptions also kicked in this year for the two new hotels in town and the Merritt Green Energy plant, representing a decrease in the city’s business tax base.

Those businesses get a 100 per cent municipal tax exemption in 2019, next year it will draw back to 75 per cent, and finally to 50 per cent in 2021, Thiessen explained.

“So this year is the biggest hit, but we knew this was coming,” she said, adding the previous council budgeted last year to even out that dip in taxes by using the previous years’ surplus. “So we are not going to go back to the taxpayer to make up that difference.”

While the city takes the hit temporarily, these new businesses illustrate positive development in the community, Held said.

“It represents future potential growth in the tax roles in the city,” he said. “It just gets deferred a bit while that tax exemption is applied.”