Hamilton councillors have plenty of work ahead of them if they want to match their record low tax increases approved the past the last few years in the 2013 budget.
Corporate Services General Manager Robert Rossini, who is leaving Hamilton for a position at the City of Toronto starting in the new year, presented a preliminary 3.6 per cent average tax increase to politicians on Dec. 7.
The potential 3.6 per cent hike is a significant drop from the 5.5 per cent tax increase first presented to politicians in September. If the tax rate were approved today, $104 would be added to the average homeowner’s tax bill.
In both 2012 and 2011, the average tax increase for city residents was less than one per cent, while in 2010 the tax hike was 2 per cent.
Councillors have already set a zero per cent tax increase goal, which will be hard to meet, especially with the Hamilton Police Service proposing a 5.25 per cent increase.
The preliminary tax increase doesn’t include about $6 million in council-related enhancements that, if approved, will push the average tax increase up by 1 per cent.
The tax hike includes a 2.3 per cent increase for all city departments, 0.8 per cent jump for boards and agencies, with the Hamilton Police Service eating up most of that chunk with their request for more than $7.1 million in extra cash. And there is 0.5 per cent in capital funding that will go towards infrastructure upgrades.
Finance staff is assuming a one per cent increase in assessment growth for 2013.
“We are trending in the right direction,” said Rossini.
Still, the city continues to be buffeted by financial pressures, including $3.3 million in winter control, $3 million for fuel, another $2.3 million for Disabled and Aged Regional Transportation System (DARTS) to accommodate the provincial government’s Accessibility for Ontarians with Disabilities Act (AODA), $1 million for street lighting and a loss of $1.2 million in revenue from the city’s blue box program.
The largest bite taken out of the city’s costs remains salaries and benefits, which consume more than 80 per cent of the city’s $1.1-billion budget.
Rossini agreed it is a big number. He said the city has already set aside some money to pay the salaries of police, fire and emergency services employees. The city’s fire service contract is scheduled to end December 2013.
Rossini pointed out that while the city’s department budgets have increased 12 per cent from 2008 to 2012, the police services budget has ballooned by 20 per cent during the same four-year period.
And even though councillors are poised to hike user fees at their Dec. 12 council meeting, Rossini said the money will go towards replenishing the planning department’s fee stabilizing reserve fund, which staff already used to cover the $1.2 million in salaries increases this year.
“Using the reserves is not sustainable,” said Rossini. “(The fee increase) will have no impact on the tax levy.”
Budget deliberations are scheduled to begin in January. City councillors are looking to approve the budget in late March or early April.