XN000022-1976-11-29 — Page 4

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MONDAY, NOVEMBER 29, 1976

ANY DECISION IN THIS CONNEXION HE SAID, MUST, OF COURSE, BE TAKEN IN THE LIGHT OF BUDGETARY REQUIREMENTS, THE BALANCE BETWEEN DIRECT AND INDIRECT TAXES AND THE EQUITABLE TREATMENT OF THOSE WHO BEAR THE BURDEN OF THE TAX.

HOWEVER, MR. FRY STRESSED THAT IT HAD TO BE REMEMBERED THAT THE FULL URBAN RATE OF 18 PER CENT WAS MADE UP AS TO TWO-THIRDS (12 PERCENT) GENERAL RATES WHICH GO TO GENERAL REVENUE, AND ONE-THIRD (6 PER CENT) TO THE URBAN COUNCIL.

HE POINTED OUT THAT WHILE, UNDER THE RATING ORDINANCE, BOTH GENERAL RATES AND URBAN COUNCIL RATES WERE DETERMINED BY THE LEGISLATIVE COUNCIL, THERE WAS, OF COURSE, NOTHING TO DEBAR THE COUNCIL FROM SEEKING A CHANGE IN ITS PERCENTAGE.

+ THE COUNCIL HE SAID, HAS BEEN MADE AWARE OF THE INCREASED RATEABLE VALUES PROPOSED AND HAS ALREADY ANNOUNCED, IN CONNEXION WITH ITS BUDGET FOR NEXT YEAR, THAT, AS A RESULT, IT EXPECTS A SURPLUS OF $147 MILLION. AS EACH PERCENTAGE POINT NEXT YEAR WILL PRODUCE AN ESTIMATED $86 MILLION OF REVENUE, AS COMPARED WITH $44 MILLION THIS YEAR, THE FORECAST SURPLUS IS EQUAL TO A LITTLE MORE THAN 1-1/2 PERCENTAGE POINTS.

+ IT IS NOT FOR ME TO SPECULATE AS TO HOW THE COUNCIL SHOULD DEAL WITH THIS INCREASED REVENUE POTENTIAL BUT, OBVIOUSLY, ITS OPTIONS ARE ESSENTIALLY NO DIFFERENT FROM GOVERNMENT'S.+