A marathon budget meeting ended on Monday with city politicians lowering the projected tax increase for 2018.
Councillors on the strategic priorities and policy committee met for eight hours to reduce the projected tax increase for next year from 3.3 per cent to 2.8 per cent.
The decline is largely due to councillors putting $1.5 million in assessment growth surplus to tax relief. Putting the surplus towards tax relief goes against a city hall policy that says assessment growth surplus should be evenly split between debt relief and infrastructure costs.
However, the move was recommended by city staff due to the costs associated with Ontario raising the minimum wage to $14 an hour in 2018.
Ward 1 Coun. Michael van Holst argued the move was the right decision.
“I think it’s nice that we’re looking at policies as guidelines more than rules,” he said. “I think when we do the multi-year budget it’s an informal promise that we’re going to stay within these numbers.”
London city council heard weeks ago the costs associated with the higher minimum wage would raise the projected tax increase for 2018 well above 2.9 per cent, which was originally projected by council when the multi-year budget process began in 2016.
Councillors voted 13-0 in favour of re-directing the assessment growth surplus, but the projected tax increase is still too high for Ward 6 Coun. Phil Squire.
“I won’t be supporting that kind of tax increase this year, I didn’t support it in the past,” he said. “Every year I vote against the budget, every year I’ve made proposals for things we didn’t need to cover, I’ll be the same this year.”
City politicians voted 10-1 in favour of the 2.8 per cent tax increase, Squire was the lone vote against.
The vote on the tax increase came hours ahead the vote to redirect the assessment growth surplus. Councillors Bill Armstrong and Jared Zaifman missed the entire meeting while councillors Anna Hopkins and Mo Salih weren’t present for the final vote.
As it stands, the average homeowner, with a house assessed at $220,000, will pay an extra $76 in 2018. When water and sewer rates are factored in, that figure increases to $101.
“We have approved a tremendous amount of growth over the course of the last several years,” said Brown. “This was to be expected, to see this kind of additional assessment growth.”
It’s possible city politicians could reduce the 2018 tax hike even further. On Tuesday, city council is set to vote on a plan to phase out a tax rebate for vacant commercial buildings. If approved by council Tuesday night, the move will save London $900,000 next year and $1.8 million in 2019.
City staff say that money could be directed to budget decisions in 2018 or delayed until next year.
If the tax hike stays at 2.8 per cent it would be slightly lower than last year’s 2.9 per cent but above the 2.5 per cent that was approved for 2015 and 2016.
Included in budget talks on Monday was a decision to approve a two-year pilot project for a discounted bus pass for teens on the LTC. Kids 12 and under ride the LTC for free, now teens 13-17 will be allowed to buy a discounted bus pass of $51. Currently a bus pass for teens costs $81.
The two year pilot project begins next September. It won’t have an impact on the tax increase but long-term funding will be needed if the discount is made permanent in 2020.
City politicians also approved maintenance and management costs for Dundas Place totalling $325,000. $250,000 will be spent on maintenance and $75,000 on management.
Construction will begin next year to transform Dundas Street into a flex street.
Final approval was also given to fund a pay increase for ward councillors, starting in 2019. The new pay won’t take effect until after next fall’s election. Councillors voted 11-2 in favour of the pay hike, with only Squire and Ward 5 Coun. Maureen Cassidy voting against it.
The pay hike will cost city hall an extra $245,000 in 2019.
Council will finalize the 2018 budget on Dec. 12.
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