John Rowswell's $5,230 tax break

You already know that Mayor John Rowswell gets a $42,148 honorarium from the City.

And if you're a reader of SooToday.com and the Sault Star, you probably know more, far more, than you ever wanted to know about his expenses, which last year included $21,391 for travel and a $3,552 car allowance.

But we're betting no one's ever told you about the little-known provisions of Section 255 of Ontario's Municipal Act, which give the Mayor a sweet tax break worth $5,230 a year.

Here's how it works. Under Section 255, one-third of the honorarium and car allowance paid to the mayor is automatically considered expense money related to the discharge of his mayoral duties.

That means one third of Mayor Rowswell's $42,148 honorarium and $3,552 car allowance are tax-free.

Exemption automatically indicated on Mayor's T4 slip

As Enrico Pino, the City's manager of accounting, crunches the numbers, the tax break is worth $5,230 a year to the Mayor, and is indicated on his annual T4 slip.

The deal is by no means limited to the Mayor. All City councillors are also eligible. Pino estimates it's worth $1,340 to each councillor who accepted the last honorarium increase, and $1,285 to those who didn't.

And there's nothing stopping Council from, on top of the one-third exemption, allowing lots of other expenses on the mayoral VISA card, subject to federal income tax rules.

Rules change on January 1

However, Ontario's Municipal Act has been undergoing substantial change, much of which comes into effect on January 1. The changes make the one-third tax exemption optional.

Unless Council passes a resolution by that date, the tax break will be lost.

Forever.

However, Council can keep the sweet deal intact by considering the issue at a public meeting during each term of office and then voting to retain it.

Issue comes before Council on Monday

Some municipalities have opted out of the exemption, but they've mostly been larger municipalities in which councillors are included in pension plans and disability benefits.

In those cases, councillors feared the exemption would reduce their pension and disability benefits.

A resolution to retain the tax break will come before Sault Ste. Marie City Council on Monday night.

Give yourself a break. Get the news for free!

If you value SooToday's exclusive, independent coverage of local news, why not make us your home page? Here's how to do it -- just click on the 'home' link at the top left of this page, then click on the 'make my homepage' button at the page bottom.