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TELEGRAPH-JOURNAL

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FREDERICTON - The Liberal government's new tax plan includes measures it says will bring more transparency to the issue of escalating property tax bills.

The new measures will alter the way property tax is calculated. And although property owners won't see any changes in the way their homes are assessed, they could witness their tax bills drop under the new system.

That's because municipalities will be restricted in how much money they can automatically collect.

"In recent years, concern has been raised that property tax revenues have increased significantly faster than inflation," states the Liberal tax plan, which was unveiled in the legislature on Tuesday.

"With increased assessment values over time, property tax revenues often increase beyond the cost of providing local services."

So under the changes, municipalities won't be entitled to reap all of the tax benefits of a booming real estate market.

Instead, the revised system allows municipalities to collect only the tax benefits stemming from new construction and inflation.

If a local government wants to collect additional money, it will be forced to raise its tax rates through a vote by a municipal council or, in the case of rural areas, the legislature.

The idea is to make municipalities more accountable and to prevent property tax bills from increasing rapidly.

The change means that homeowners, regardless of income, could get a break on their property tax bills even if the values of their properties continue to increase.

Conservative finance critic Bruce Fitch panned the changes, which were presented along with the 2009-10 provincial budget.

"This budget does not provide any help to anyone on the issue of high property taxes. It doesn't address the need for people to find some relief," said the Riverview MLA.

"They've downloaded (the issue) to the municipalities and if I were still the mayor of Riverview I'd be very upset that I have to deal with the problem."

Lise Ouellette, executive director of the Association of French Municipalities, said she is also displeased with the changes.

Ouellette agrees there is a major problem with escalating property tax bills, noting that low- and fixed-income New Brunswickers are hit especially hard.

But she insists the municipalities must be more involved in finding the solution.

"We're a bit uncomfortable with this approach," she said. "The approach, we believe, is not the right one."