Property owners in the region are tentatively set to shell out an extra $60,000 next year to offset a tax perk that’s no longer available to elected officials.
Directors on the board of the Regional District of Okanagan-Similkameen voted 16-3 on Thursday to go along with a citizens’ committee’s recommendation to boost their pay by 11.9%.
The five-person panel that was struck to investigate if, and how, RDOS directors should be compensated for a change in federal policy that no longer sees elected officials receive a third of their pay tax-free.
Penticton Mayor John Vassilaki, who sits on the RDOS, emphasized the increase is not a simple pay hike.
“It’s strictly to make up what we lost through the income tax portion,” he said.
The increase, which would cost the average household about $1.11 and take effect Jan. 1, 2020, still needs formal approval at the Dec. 19 board meeting.
If passed, the RDOS chairperson’s annual pay would increase by $3,943 to $37,079, a rural director’s earnings would rise $2,629 to $24,723, and a municipal director’s stipend would climb by $760 to $7,148.
Directors receive a base stipend, plus pay for each meeting they attend, plus their remuneration is automatically adjusted each year for inflation. Last year, the honorariums cost taxpayers a total of $444,000.
Frank Armitage, a former Princeton mayor and RDOS director who sat on the committee, said the group looked at 24 other regional districts in B.C. to see how they handled the issue.
All of them took raises, he said, which ranged from 7% to 17%.
“So there was not a formula that readily fixed the concerns of all regional districts,” continued Armitage.
Coming up with an across-the-board increase to offset the tax-free perk is impossible, because its effect will vary by politician, depending on his or her overall financial situation, explained fellow committee member Bill Ross.
George Bush, the long-time director for Area B (Cawston), said the tax change, which took effect Jan. 1, 2019, was definitely noticed in his household’s finances.
“My main concern is the federal government has downloaded this expense to our communities,” he continued, “and I really have a hard time with our taxpayers having to come up with another $60,000. That’s what I’m struggling with.”
The tax perk was created decades ago to compensate elected officials for out-of-pocket expenses like mileage and incidentals to spare them the trouble of claiming reimbursements.
Summerland Coun. Doug Holmes, one of the three directors to vote against the measure, noted politicians can still claim those expenses on their taxes.
“The best practice, I think, would be for an outgoing board to determine the level of compensation for the incoming board,” Holmes continued.
“When I campaigned, I knew what I was getting myself into.”
RDOS chairwoman Karla Kozakevich countered that the loss of the tax perk amounts getting paid less for the same work.
“After putting in seven years of working hard in my position… and then getting less take-home pay, to me, it felt like a kick in the head,” she said.
The others who voted against the pay increase were Area I (Skaha West/Kaleden/Apex) Director Subrina Monteith and Area G (Rural Keremeos/Hedley) Director Tim Roberts.
Roberts said he would have difficulty passing on the increase to his constituents, while Monteith said she signed up to serve knowing the tax-free allowance was being eliminated.
The other members of the citizens’ committee were Tim Hodgkinson, Lanny Smith and Lionel Trudel.