The local revenue budget is one of the most visible and important elements of the First Nation property tax system. For the majority of taxing First Nations, it appears as a Schedule to the First Nation’s Annual Expenditure Law or By-law, and is published in the First Nations Gazette. Not only is it a planning tool and a way to explain how community objectives and expected levels of services will be met, its serves as a point of engagement with taxpayers and members who may want to provide input on how budget resources are allocated.
Local revenue budgets have evolved from their early more modest versions, reflected in Budget By-laws made in late 1980’s and early 1990’s. These budgets would often itemize expenditures such as “telephone” and “janitor supplies”, a practice which may have stemmed from the level of detail associated with federal contribution agreements. By the mid 1990’s, the Indian Taxation Advisory Board (ITAB) developed nine standardized expenditure categories as a part of its Budget Based Tax Rates Policy. Nine categories were used because they were similar to those used by communities in submitted expenditure bylaws. The categories and were also similar to expenditure categories used by local governments while being comparable to government expenditure categories used by Statistics Canada. The ITAB advocated a standardized approach to facilitate the budget-making process, improve transparency for taxpayers, support First Nations tax administrators and promote investor confidence.
The advent of the First Nations Fiscal Management Act (FMA) in 2005, meant the introduction of a new First Nation local revenue budget template to reflect fiscal powers under the FMA. Since 2007, the FNTC has made modifications to its sample local revenue budget for both the FMA and section 83 of Indian Act tax system to reflect policy changes and new approaches to community economic planning, transparency, and budget reporting. First Nation budget reporting continues to evolve with advances in digital automation (Tax Administration System-TAS), increasing use of tax advisory groups, and on-line posting of proposed budgets for community input. The First Nation local revenue budget has come a long way, but it has never wavered from striving to be a beacon of transparency and accountability in the First Nation tax system.