In Brief: In tough economic times businesses are more inclined to look at ways to cut costs, and many these days are looking at their property tax bill. AIMS Executive Vice-President Charles Cirtwill suggests that means an increase in appeals of property tax assessments, which if successful could mean a drop in revenues for towns and cities throughout the region.

Municipalities across the province will likely have to cope with dwindling revenues in the coming months as businesses challenge property tax assessments to try to save money, predicts the executive vice-presi­dent of the Atlantic Institute for Market Studies.

Charles Cirtwill said the decrease in the value of assessments now faced by the tiny town of Annapolis Royal is “probably the tip of the iceberg.”

The town learned it will lose more than half a mil­lion dollars from its $2.1-million operating budget af­ter a reassessment of Nova Scotia Power Inc.’s tidal power plant.

“No question it’s exactly where (we’re) going. If this recession lasts longer, say, than six to eight months, (companies) will be very aggressively ap­pealing their assessments,” Mr. Cirtwill said Tues­day. “It’s an immediate effect on their bottom line.”

As well, he said, commercial properties, such as malls, apartment buildings and office spaces, are as­sessed on market value, which declines in economic hard times as rents and revenues decrease. “I think this is an inevitable symptom of an eco­nomic downturn,” Mr. Cirtwill said.

He said he saw a similar situation in the 1990s when he was an adjudicator for the municipal assessment appeals court, where he mostly dealt with commer­cial property appeals.

“My sense of it, because I started . . . just at the edge of the last recession, is when an economic downturn happened, you saw a spike in the number of appeals.” Officials from the province’s smallest municipal­ity plan to appeal Nova Scotia Power’s new tax assess­ment in their town, even as they scramble to find ways to deal with the financial crisis that looms over the coming fiscal year.

The reassessment of the power company proper­ties was done at the request of the Union of Nova Sco­tia Municipalities. Some municipalities will benefit, while others will lose.

The money doesn’t come from the utility but from the provincial government as grants in lieu of taxes. Mr. Cirtwill said other municipalities will also have to figure out ways to deal with the tax revenue decreases if the recession continues.

Over the past several years, tax assess­ments have risen almost as a matter of course, allowing municipalities to main­tain lower tax rates but still take in more money, he said.

With assessments falling, officials will likely propose increasing rates, he said.

“So you’re going to see a lot more inter­esting debates,” he said. “I think the im­portant thing we’re going to see is actual transparency . . . at the municipal level.

“They’re actually going to have to take an action on their part that we can see and that they will have to defend.”

They may also find themselves tighten­ing their belts as they feel the funding squeeze. “That increase in transparency and that pressure on spending growth — the actual need to start reining it in a little bit — those aren’t bad things,” he said.

A spokesman for the Nova Scotia Utility and Review Board said the board has yet to see any major commercial tax assess­ment appeal recently. But Paul Allen said that may be because it takes time for ap­peals to work their way through the sys­tem before coming to the board.