By Joel Wittnebel/The Oshawa Express
Councillors are vehement that it’s not going to happen, but projections for the upcoming budget year see a 3.8 per cent tax increase for Oshawa residents, which could mean almost $80 more on the average tax bill.
“We would be incompetent,” says Councillor John Aker of passing the potential increase. “It’s just not realistic. I don’t believe there is a person in this room who thinks we’re going to pass a 3.8 per cent tax increase.”
Those were his words during the most recent meeting of the finance committee in response to a report from staff that predicted the steep increase come budget time. The timeline also predicts a 2.51 per cent increase in 2019, following which the burden will ease as the increase is projected to drop to 1.83 per cent and 1.85 per cent in 2020 and 2021 respectively, mostly due to the city paying off some of its larger debt bills.
The budget projections take into account a number of factors in the years ahead, including increased tax dollars as the city continues to grow and the dollars that will be needed to service that growth, the increase in wages to city employees and the potential impacts of Bill 148 on the city’s bottom line, as well as the city’s annual contribution of $100,000 to the Centre for Collaborative Education at Durham College over the next nine years.
“These are the known expenditure increases, they do not include anything that council might potentially wish to add to the budget,” says Stephanie Sinnott, the city’s executive director of finance and city treasurer.
Despite that, Aker took issue with several aspects of the report, including the large contribution to reserves in 2018 ($1,733,000), which then falls off to only $300,000 the following year. Councillor Aker was also concerned that the final dollar amounts from the Municipal Property Assessment Corporation (MPAC) have yet to be received by the city. MPAC assessments are used to give municipalities a clear idea of the property values in their region.
“I think it’s premature not having those figures here,” he said. “In my opinion, it’s just not good financial planning.”
In terms of the city’s reserve accounts, the increase in 2018 is attributed to a recent report that recommended council needed to start following a much more disciplined approach to contributing to their savings. The report outlined how in the coming years, if nothing changed, reserves earmarked for capital projects will take a nosedive as more and more dollars will be going toward infrastructure projects.
For that reason, Councillor Amy McQuaid-England says she has no issues with the projections outlined in the report, highlighting the fact that while council has whittled away tax increases in previous budgets in order to ease the burden on residents, it has come back to hurt them now.
“For a number of years, I have talked about, at budget time, how if we keep continuing to do budget increases that are small, or smaller than what is actually needed, where we shave off a little bit here and a little bit there and make it so that it’s a nice little percentage that can be packaged up and told to the public that it’s a good thing, but it actually hasn’t been a good thing,” McQuaid-England said. “This increase is a direct reflection of past councils’ decisions.”
The councillor, who has made it public that she will not be running for re-election in 2018, noted that she hoped council would be able to put politics aside and move forward with a realistic budget increase that the city requires to address needs in the years ahead.
“It’s unfortunate that in an election year, staff need to be asking for a 3.8 per cent increase,” she says. “If we do not approve this and try and negotiate a smaller rate so that it is convenient for an election year, the people who come in the next term will have to deal with some very serious financial obligations that we will leave for them.”
However, the potential impacts on businesses and taxpayers was too much for Aker to get behind.
“I just don’t want the 3.8 (per cent) hanging over the businesses, the residents, this council, that’s not what it’s going to be,” he said. “I would rather see it (the report) come back to the next finance meeting…and then we can do a very, what I would call, robust discussion.”
Aker’s motion to refer the report back to staff for further information carried.
The finance committee meets again on Nov. 16.