Newly elected Richmond councillor, Kelly Greene, thinks she and her colleagues should forgo a large increase expected in their salaries next year, saying council needs to show an example of financial responsibility.
Federal tax rules have changed and municipal council members will no longer be able to claim one-third of their salaries as exempt from federal taxes, as has been the case for years.
Discussions with staff alerted the new councillor that they are recommending a jump in salary to compensate for the change in tax policy so that there won’t be a net loss for them.
“It’s going to be a really, really substantial salary increase and on top of that we’re facing a lot of cost pressures this year,” Greene said.
Greene was planning to bring a motion to Wednesday’s council meeting “to cancel Richmond City Council pay increase in 2019 due to federal taxation changes and to phase in the planned salary increases for elected representatives from 2020-2024.”
Greene said staff is suggesting that a large increase will ensure the mayor’s and councillors’ net pay stays the same, but, she pointed out, what taxpayers pay goes up to compensate for the loss of tax exemptions.
“I know it’s not a large budgetary item but it really speaks to… being able to understand where our constituents come from – if our constituents’ costs go up, they can’t go to their employer or they can’t go back to where they’re getting their pension from and (say) it’s not enough, I want more because my bottom line has change – they don’t have that privilege,” Greene said.
Greene said, before she was elected, she wasn’t aware council members didn’t pay taxes on one-third of their salaries – she assumed that the salaries listed in the financial documents were taxed like everyone else’s salaries.
“I don’t think anybody knew that we had a one-third tax exemption – I’m a very informed person - I didn’t know there was a one-third tax exemption (for) municipal elected officials,” she said.
Greene thinks council needs to set an example in their own finances, even if it’s a small item in the grand scheme.
“The budget impact of us not getting a big salary increase is extremely minimal – our salaries are so small in the scope of how much money the city spends but we need to demonstrate we’re responsible at every line item, even the ones that personally affect us,” Greene said.
Greene said the city is facing some “cost pressures” - the city is growing and it’s starting to catch up, for example, the low number of emergency personnel.
Greene was planning to bring the motion forward at today’s council meeting, which was scheduled for the late afternoon.
