Hamilton's projected deficit so far could be $23 million by May

News Apr 16, 2020 by Kevin Werner Stoney Creek News

Hamilton homeowners could be on the hook next year to pay off the city’s skyrocketing deficit that is soaring into the millions of dollars because of the city’s response to the novel coronavirus pandemic.

City finance staff provided a grim financial outlook during council’s virtual council meeting April 15, projecting a budget deficit by the end of May of about $22.8 million.

The estimated deficit is due to lost revenue the city has accumulated since the novel coronavirus pandemic began in March, including from transit fares, recreation fees, Provincial Offence Act payments, parking, Ontario Lottery and Gaming slots and tax penalties and interest when council agreed April 8 to defer residents’ April 30 tax instalment for 60 days.

The city has spent an additional $24.6 million in public health costs, Ontario Works and housing services in staffing and helping vulnerable people as all three services are bearing the brunt of the pandemic spending. It is anticipated the city will spend another $86,000 for cleaning and medical supplies at Macassa and Wentworth lodges, while $203,000 is being allocated for paramedics and another $216,000 for firefighters.

Hamilton has already received about $18 million from the provincial government to help cover social housing and Ontario Works expenses.

Mayor Fred Eisenberger said the city’s financial troubles could deepen as the pandemic continues into the year with Hamilton looking at a deficit of about $50 million.

He warned if the federal and provincial governments fail to bailout Hamilton and other municipalities, property owners will have to pay for the exploding deficit.

“If we don’t get a bailout, (the city) will look at cutting services dramatically,” said Eisenberger during his April 15 town hall meeting. “Or doing a bit of both; cutting services and adding this to the next year’s tax bill. Neither one of these options is particularly positive because we will hit the very same people that the federal government is trying to help.”

Municipalities are prohibited under the Municipal Act from budgeting for an operating deficit. Any year-end deficit must be covered by the next year budget, including through taxes.

Mountain Coun. Terry Whitehead said every time he walks down his street, residents yell at him that they can’t pay their property taxes because they have lost their jobs.

“I didn’t vote for the tax increase (which was 2.9 per cent and included in the 2020 budget council approved March 20) because we didn’t know what to expect with the COVID-19 experience,” said Whitehead. “The residents on my street, 80 per cent of them are laid off.”

Corporate Services General Manager Mike Zegarac provided the sobering financial news to shaken councillors, saying the city has already spent $417 million since March 31, about $43 million extra than in 2019. The city on average spends during a year about $2.3 billion.

“These are significant figures,” said Zegarac.

He said the city has about $990 million in reserves, which could be used to help offset a portion of any deficit.

Ward 4 Coun. Sam Merulla, calling he situation “depression numbers,” said municipalities are unable to withstand the financial weight of their looming deficits.

“It is just a non-starter,” he said. “Only (the federal and provincial governments) can get us out of this crisis. I’m not prepared to cut anything on our capital projects.”

Eisenberger has insisted discussions have been ongoing between municipalities and the federal and provincial governments about a possible financial bailout. He said federal officials are talking about “billions of dollars” to help municipalities, but warned any financial help will come only at the end of the pandemic. He said the federal and provincial governments are focused on assisting individuals and businesses first.

Ontario Finance Minister Rod Phillips said during a recent news conference that provincial officials have been discussing municipalities’ financial problems with mayors and are prepared to assist them.

Councillors agreed to Ward 5 Coun. Chad Collins’ motion to have staff examine what capital projects can be delayed in an attempt to save taxpayers’ money next year.

Eisenberger echoed the sentiments of many councillors who are reluctant to cut capital projects to save money since they will be essential to stimulate Hamilton’s economy whenever the federal and provincial governments give the green-light to reopen businesses.

“Capital projects down the road will be a capital stimulus,” said Eisenberger. “This is not just our budget. It is also about our community, the individuals in our community and our future economic recovery.”

Hamilton residents could be paying higher taxes in 2021 to cover ballooning budget deficit

News Apr 16, 2020 by Kevin Werner Stoney Creek News

Hamilton homeowners could be on the hook next year to pay off the city’s skyrocketing deficit that is soaring into the millions of dollars because of the city’s response to the novel coronavirus pandemic.

City finance staff provided a grim financial outlook during council’s virtual council meeting April 15, projecting a budget deficit by the end of May of about $22.8 million.

The estimated deficit is due to lost revenue the city has accumulated since the novel coronavirus pandemic began in March, including from transit fares, recreation fees, Provincial Offence Act payments, parking, Ontario Lottery and Gaming slots and tax penalties and interest when council agreed April 8 to defer residents’ April 30 tax instalment for 60 days.

The city has spent an additional $24.6 million in public health costs, Ontario Works and housing services in staffing and helping vulnerable people as all three services are bearing the brunt of the pandemic spending. It is anticipated the city will spend another $86,000 for cleaning and medical supplies at Macassa and Wentworth lodges, while $203,000 is being allocated for paramedics and another $216,000 for firefighters.

Related Content

Hamilton has already received about $18 million from the provincial government to help cover social housing and Ontario Works expenses.

Mayor Fred Eisenberger said the city’s financial troubles could deepen as the pandemic continues into the year with Hamilton looking at a deficit of about $50 million.

He warned if the federal and provincial governments fail to bailout Hamilton and other municipalities, property owners will have to pay for the exploding deficit.

“If we don’t get a bailout, (the city) will look at cutting services dramatically,” said Eisenberger during his April 15 town hall meeting. “Or doing a bit of both; cutting services and adding this to the next year’s tax bill. Neither one of these options is particularly positive because we will hit the very same people that the federal government is trying to help.”

Municipalities are prohibited under the Municipal Act from budgeting for an operating deficit. Any year-end deficit must be covered by the next year budget, including through taxes.

Mountain Coun. Terry Whitehead said every time he walks down his street, residents yell at him that they can’t pay their property taxes because they have lost their jobs.

“I didn’t vote for the tax increase (which was 2.9 per cent and included in the 2020 budget council approved March 20) because we didn’t know what to expect with the COVID-19 experience,” said Whitehead. “The residents on my street, 80 per cent of them are laid off.”

Corporate Services General Manager Mike Zegarac provided the sobering financial news to shaken councillors, saying the city has already spent $417 million since March 31, about $43 million extra than in 2019. The city on average spends during a year about $2.3 billion.

“These are significant figures,” said Zegarac.

He said the city has about $990 million in reserves, which could be used to help offset a portion of any deficit.

Ward 4 Coun. Sam Merulla, calling he situation “depression numbers,” said municipalities are unable to withstand the financial weight of their looming deficits.

“It is just a non-starter,” he said. “Only (the federal and provincial governments) can get us out of this crisis. I’m not prepared to cut anything on our capital projects.”

Eisenberger has insisted discussions have been ongoing between municipalities and the federal and provincial governments about a possible financial bailout. He said federal officials are talking about “billions of dollars” to help municipalities, but warned any financial help will come only at the end of the pandemic. He said the federal and provincial governments are focused on assisting individuals and businesses first.

Ontario Finance Minister Rod Phillips said during a recent news conference that provincial officials have been discussing municipalities’ financial problems with mayors and are prepared to assist them.

Councillors agreed to Ward 5 Coun. Chad Collins’ motion to have staff examine what capital projects can be delayed in an attempt to save taxpayers’ money next year.

Eisenberger echoed the sentiments of many councillors who are reluctant to cut capital projects to save money since they will be essential to stimulate Hamilton’s economy whenever the federal and provincial governments give the green-light to reopen businesses.

“Capital projects down the road will be a capital stimulus,” said Eisenberger. “This is not just our budget. It is also about our community, the individuals in our community and our future economic recovery.”

Hamilton residents could be paying higher taxes in 2021 to cover ballooning budget deficit

News Apr 16, 2020 by Kevin Werner Stoney Creek News

Hamilton homeowners could be on the hook next year to pay off the city’s skyrocketing deficit that is soaring into the millions of dollars because of the city’s response to the novel coronavirus pandemic.

City finance staff provided a grim financial outlook during council’s virtual council meeting April 15, projecting a budget deficit by the end of May of about $22.8 million.

The estimated deficit is due to lost revenue the city has accumulated since the novel coronavirus pandemic began in March, including from transit fares, recreation fees, Provincial Offence Act payments, parking, Ontario Lottery and Gaming slots and tax penalties and interest when council agreed April 8 to defer residents’ April 30 tax instalment for 60 days.

The city has spent an additional $24.6 million in public health costs, Ontario Works and housing services in staffing and helping vulnerable people as all three services are bearing the brunt of the pandemic spending. It is anticipated the city will spend another $86,000 for cleaning and medical supplies at Macassa and Wentworth lodges, while $203,000 is being allocated for paramedics and another $216,000 for firefighters.

Related Content

Hamilton has already received about $18 million from the provincial government to help cover social housing and Ontario Works expenses.

Mayor Fred Eisenberger said the city’s financial troubles could deepen as the pandemic continues into the year with Hamilton looking at a deficit of about $50 million.

He warned if the federal and provincial governments fail to bailout Hamilton and other municipalities, property owners will have to pay for the exploding deficit.

“If we don’t get a bailout, (the city) will look at cutting services dramatically,” said Eisenberger during his April 15 town hall meeting. “Or doing a bit of both; cutting services and adding this to the next year’s tax bill. Neither one of these options is particularly positive because we will hit the very same people that the federal government is trying to help.”

Municipalities are prohibited under the Municipal Act from budgeting for an operating deficit. Any year-end deficit must be covered by the next year budget, including through taxes.

Mountain Coun. Terry Whitehead said every time he walks down his street, residents yell at him that they can’t pay their property taxes because they have lost their jobs.

“I didn’t vote for the tax increase (which was 2.9 per cent and included in the 2020 budget council approved March 20) because we didn’t know what to expect with the COVID-19 experience,” said Whitehead. “The residents on my street, 80 per cent of them are laid off.”

Corporate Services General Manager Mike Zegarac provided the sobering financial news to shaken councillors, saying the city has already spent $417 million since March 31, about $43 million extra than in 2019. The city on average spends during a year about $2.3 billion.

“These are significant figures,” said Zegarac.

He said the city has about $990 million in reserves, which could be used to help offset a portion of any deficit.

Ward 4 Coun. Sam Merulla, calling he situation “depression numbers,” said municipalities are unable to withstand the financial weight of their looming deficits.

“It is just a non-starter,” he said. “Only (the federal and provincial governments) can get us out of this crisis. I’m not prepared to cut anything on our capital projects.”

Eisenberger has insisted discussions have been ongoing between municipalities and the federal and provincial governments about a possible financial bailout. He said federal officials are talking about “billions of dollars” to help municipalities, but warned any financial help will come only at the end of the pandemic. He said the federal and provincial governments are focused on assisting individuals and businesses first.

Ontario Finance Minister Rod Phillips said during a recent news conference that provincial officials have been discussing municipalities’ financial problems with mayors and are prepared to assist them.

Councillors agreed to Ward 5 Coun. Chad Collins’ motion to have staff examine what capital projects can be delayed in an attempt to save taxpayers’ money next year.

Eisenberger echoed the sentiments of many councillors who are reluctant to cut capital projects to save money since they will be essential to stimulate Hamilton’s economy whenever the federal and provincial governments give the green-light to reopen businesses.

“Capital projects down the road will be a capital stimulus,” said Eisenberger. “This is not just our budget. It is also about our community, the individuals in our community and our future economic recovery.”