Council to explore pay raises to deal with changes to tax structure

On Jan. 1st, the one-third tax-free option for elected officials is set to end

Red Deer City council will be looking at possible pay hikes to offset the elimination of the ‘one-third tax-free option’ that has been in place for elected officials.

Council tabled the issue during this week’s meeting for future consideration, but council notes show that as of Jan. 1st, the one-third tax-free allowance will be coming to an end due to amendments to the Income Tax Act.

In effect, that means that net pay for the mayor and councillors would be reduced overall by $59,000.

One option is to adjust gross salaries to preserve current net pay.

The other is to accept reduced net pay.

To make up for the difference through ‘grossing up’, councillors would land a pay increase of 13.48 per cent ($60,466.44 to $68,618.16) which would end up being a net pay difference to their overall income of $2.86.

Mayor Tara Veer would see a pay increase of 18.65 per cent ($112,198.95 to $131,940.43) which would result in a net pay overall increase of $1.94.

Several other municipalities have opted to ‘gross up’ elected officials’ salaries to keep them essentially where they currently are.

These communities include Strathcona County, Medicine Hat, Kelowna, Grande Prairie and Wood Buffalo.

“In our local region, Lacombe and Lacombe County have (also) followed suit.”

Meanwhile, Red Deer Public School board has opted to gross up their pay while the Red Deer Catholic School board has yet to decide, according to council notes.

-with information from the City of Red Deer

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