County taxes for 2020 are a bigger problem than usual. The Province has reduced the amount of money they plan to transfer to Municipalities and the County estimates that they will need to find an extra $1.4M in revenue because of that. That would mean an additional 2.5% increase in the levy. Inflation for capital projects is best measured by the Non-residential Construction Price Index which is currently running at more than 5% – that is, higher than CPI (1.9% excluding gas). So because of inflation, the total operating and capital budget would require a 2.8% increase in the levy. However, staff plan to find efficiencies of 1% so the planned net increase in the total budget (because of inflation) is 1.8%. Unfortunately much of the County’s infrastructure (roads, bridges and social housing) is nearing the end of its useful life so a levy to catch up on this is another 0.8% for a total increase of 2.6%. Even with that, staff are concerned that there is not enough money to pay for necessary infrastructure work. Add in the 2.5% required to maintain the same level of service after Provincial cuts and the increase that staff wants comes to 5.1%.
Impact of Provincial Cuts
A report by staff listed the estimated cost of “proposed Provincial policy changes to date” as follows:
|Health Unit Levy (required to maintain same level of service)||$349,572|
|Child Care Funding||$401,931|
|Ontario Works and Community Homelessness Prevention||$400,186|
|Small Business Advisory Centre Funding||$89,500|
|Land Ambulance Funding||$180,634|
|Estimated Total Impact||$1,421,823|
|2020 levy increase required to offset||2.5%|
Note: preliminary estimates of proposed changes subject to change
On 19 June at the County Council meeting, when presented with this request for an increase in the levy of 5.1%, Council instructed staff to target a three per cent levy increase, and return with recommendations on how to close the two per cent gap.
The responsibility for this will end up with Financial Director Glenn Dees and CAO Jennifer Moore – photo at right is from their presentation to Cobourg Council in March this year.
Obviously, either some services will be cut back or some Capital projects deferred.
So you’d think that the paying public would be consulted on what the cuts might be. But because of their experience last year and the year before, in 2018 County Council voted to discontinue open houses where staff presented the budget to the public and only have online surveys. That’s because, in 2017 eleven citizens showed up for the open house and only two surveys were completed; then in 2018 five citizens showed up and there was only one response to the survey. No new survey has yet been made available or scheduled but there is time yet. There is a long process now required with Councillors getting a first look at the proposed budget late November with a presentation on December 18.
Note that there is also additional money coming from growth in the tax base – that is, more properties being taxed – but that is taken into account. Since taxpayers are mostly interested in what they actually pay, the discussion at council was focused on the levy – that is, the amount of the tax bill increase (assuming your MPAC valuation goes up the same as the average for the County).