The Whitehorse Chamber of Commerce is calling on the city not to raise property taxes this year.

Chamber president Rick Karp addressed city council at its meeting Monday evening.

Given the state of the Yukon economy, he argued, the proposed 1.7 per cent property tax hike should not go ahead.

“We don’t believe this is the time to increase taxes,” Karp said. He pointed to the decline in Gross Domestic Product for the territory over the last three years.

The proposed $70.6-million operating budget for the city would see the 1.7 per cent tax hike along with increases of four per cent to water and sewer bills, 6.8 per cent to waste collection and other boosts to a variety of other fees.

Given the state of the local economy, Karp told council, the city should be leading the community to be more fiscally responsible and implement a zero per cent tax increase.

“Whitehorse businesses are having a difficult time,” he said, noting many have had to make cuts to stay viable.

Karp pointed out that in Yellowknife, the city has opted for no property tax increase this year in light of the economic downturn.

“We recommend Whitehorse follow Yellowknife’s lead,” he said.

He went on to voice concerns over the timing of the operating budget, suggesting it should be released earlier so it’s not already well into the fiscal year before it’s adopted.

Karp also took issue with the potential cost of the city’s proposed $56-million building consolidation project.

The consolidation project is a multi-year initiative which falls under the capital budget.

Council members challenged Karp on his points, wondering how the city could keep the services it has without the proposed tax increase to pay for them.

“A lot of difficult decisions were made,” Coun. Samson Hartland said of the proposed budget.

For his part, Karp replied that the city has had tax increases each year for the last decade.

Past budgets have seen the city report a surplus which has then been directed into city reserves, he noted.

“We feel there is sufficient finances there now,” he said.

Mayor Dan Curtis attended the meeting by conference call.

Coun. Jocelyn Curteanu, who was acting as mayor, pointed out the city has a number of policies around reserves that dictate a certain percentage has to go to reserve funds.

The reserves are there to ensure cash is in the bank should repairs be needed on infrastructure or equipment.

Curtis also noted that while the city may show a surplus, part of that comes from the inclusion of city land and infrastructure in the accounting practices.

Curteanu questioned Karp on whether he believes having money set aside for those types of situations is sound financial planning.

Karp agreed that there should be cash set aside for unforeseen circumstances, a practice he acknowledged is standard for most businesses.

However, he noted the continual tax increases over the last 10 years are concerning.

“I think there has to be further study,” he said of the latest proposed tax hike.

Curtis noted that half the city’s budget goes to staff wages and benefits which fall under union contracts.

The city has to adhere to those contracts, he said, emphasizing the city “is always looking for efficiencies.”

Karp responded by noting the chamber is well-aware of labour costs. Though the city is bound by contracts, it does have some options in the number of people it employs, he said.

Coun. Roslyn Woodcock raised the decision of Yellowknife city council not to raise property taxes there this year in light of the economic downturn. She asked for further details on its budget, such as the exact tax rate and the impact on services.

Karp didn’t have that information on hand Monday evening, but said he would provide it at a later date.

Woodcock pointed out the zero per cent tax increase is just one part of Yellowknife’s budget.

Coun. Rob Fendrick encouraged Karp to look over the Whitehorse city services policy available on the city website and think about what services could be changed.

Karp was the only delegate to speak at last night’s budget input session.

Assistant city clerk Norma Felker told council two written submissions raising concerns about the operating budget were also received.

A report on the public input session will come forward next week.

Council is set to vote on second and third readings of the budget later this month.