HOLD ONTO YOUR WALLETS: BUDGET 2015 BEGINS

Taxes

Thorold’s budget for 2015 is posted on-line now and, since Staff was ordered by the last Council to come in under 2.5%, that’s exactly what they did. The number they ended up at is 2.25% on the City portion of the levy (property taxes), which translates to approximately 1.2% on the total tax bill. That amounts to an average of $37.50 per household based on the value of an average residence of $216,550, plus $2.50 due to a tax burden shift.

As the report states, this is a “bare-bones budget”: no frills, no fabulous new construction or equipment purchases, although I’m sure anyone can find something in there that they don’t think is necessary. In other words, there’s nowhere to go but up. On the bright side, there aren’t any service cuts – yet.

The danger of this budget is in how they reduced the bang to the taxpayer. As the report states, there is a higher than normal reliance on reserves to bring down the number of items that would normally have to be paid for out of property tax revenues. And once these reserves are gone, they’re gone forever, unless you bring them back up by raising taxes. The report makes no bones about it: “Attainment of these targets for future years’ budgets will likely require service cuts.” That’s because Staff had to use $9-$12 million of alternative funding to reach the stated goal.

Fine, we say, as long as we don’t have to pay more taxes.

It’s important to remember this is one of main reasons Thorold is in the jam in which it has found itself for the past several years. Besides the loss of industrial taxes, past reserves were used to fund lower property tax increases, resulting in the high increases in the last term because there were no reserves in which the money was saved to do the things that had to be done. In addition, at least some of the equipment purchases or repairs that are deferred will have to be done during the year, as were several emergency repair jobs in 2014, leading to budget overruns or further depletion of reserves, if there are any left.

Revenues have gone up by $503,000 this year, due mostly to building permit charges and various federal and provincial funding. But there is also $6.5 million in new and unfinished projects, all of an infrastructure nature such as roads and water and sewer, the most basic of municipal services. And they’re $469,000 behind in equipment replacement and remediation.

Nobody actually wants more taxes, including me, but we’ll soon find out which way this Council is going to deal with this since the first budget meeting is Monday night. I’ll keep you posted and publish the new tax level after each session. If things go as they usually do, the numbers should go up and down several times as some things are added and others thrown out. The full schedule is as follows:

  1. Monday, March 2, 2015
  2. Tuesday, March 10, 2015
  3. Wednesday, March 18, 2015
  4. Tuesday, March 24, 2015
  5. Wednesday, April 1, 2015 (April Fool’s Day – no joke, that’s when they’re scheduled to make their final decision)

2 thoughts on “HOLD ONTO YOUR WALLETS: BUDGET 2015 BEGINS

  1. Thanks for your report, Tony.
    Eating up reserves is scary!!
    Personally, I have little argument with getting a few extra years out of each piece of equipment to spread out capital equipment purchases. Has there been any SERIOUS discussion of investigating the privatization of any City work/services to get a comparison on potential savings???

    Like

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