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Zero per cent tax hike comes into focus
(Flamborough Review, Kevin Werner, Sept 27 2013)

Hamilton politicians can see their zero per cent tax target more clearly this year.

Financial staff says if the 2014 budget were approved today, residents would pay on average about 2.8 per cent more than last year – one of the lowest budget beginnings in years.

“This is a favourable starting point not only from last year, but from previous years,” said Mike Zegarac, acting corporate finance general manager.

Last year, councillors began the 2013 budget negotiations with a 5.5 per cent average tax increase. They managed to whittle it down to about 1.9 per cent, or an extra $65 per household. In the past, councillors have started their budget deliberations at around 12 or 13 per cent. In 2011, the average tax increase was 0.8 per cent, the lowest in the city’s post-amalgamation history.

“This is a reasonable start,” said Ancaster councillor Lloyd Ferguson.

Councillors have already established a zero per cent tax increase goal in 2014, which is a municipal election year.

If politicians can get to zero, it will mean either cutting $20 million from the budget, or finding comparable revenues.

The city, though, is facing a rising debt load beginning in 2014, when it jumps to $809 million from $294 million. It balloons to just over $1 billion in 2015 and 2016. In 2017 the debt is projected to drop slightly to $985 million.

The credit agency Standard and Poor’s has identified Hamilton as having limited flexibility to relieve that debt.

Hamilton is in a difficult position because the city has a lower average income to raise revenue, S&P’s report stated.

Councillors will also have to deal with the Hamilton Police Service’s budget request, which reflects in preliminary stages a 3.65 per cent or $5.1-million increase.

Last year, council and the Police Chief Glenn De Caire became embroiled in a war of words as politicians tried to get the board to cut the police budget from its initial 5.45 per cent bump. It was later reduced to about 3.71 per cent.

The police chief this year is asking for about $1 million to purchase Tasers for officers.

“(The police budget) is a very fluid process,” said Zegarac.

Other obstacles to reaching a zero per cent increase include a rising number of Ontario Works applicants, the McMaster lease, funding for social services’ discretionary benefits and implementing the Accessibilities for Ontarians with Disabilities Act.



The 2014 Tax Budget Preliminary Outlook was presented at the Sept 18, 2013 General Issues Committee meeting.