London city council approves 2.8% tax hike for 2018

London city council passed the 2018 budget Tuesday night, but not without some fireworks.

City politicians approved the budget which includes a 2.8 per cent tax hike for next year but only after Ward 7 Coun. Josh Morgan made a last ditch effort to reinstate discounted bus tickets for seniors.

The senior discount will end in the New Year, at which time it will be replaced by a low income bus pass for Londoners of all ages.

Morgan has heard from some seniors in his ward who say they won’t use the bus without the discount.

“I have several pieces of correspondence from a number of my constituents who are indicating they may not use the bus if this is the case,” he said.

Councillors Phil Squire and Harold Usher also said they’ve heard from people in their ward upset over the decision.

The issue for some is seniors fall just outside of the threshold for low income while others don’t consider themselves to be low income.

Morgan pushed to include the discounted bus tickets for seniors in the pilot project that will start next year for a discounted youth bus pass. His motion would have cost $250,000 but was described as a “budget bomb” by City Treasurer and Chief Financial Officer Anna Lisa Barbon.

“Although this may be a small amount it will just incrementally add to what we already have to put forward for the next council to make a very challenging decision of how to permanently fund that, should they wish to proceed,” she said.

It’s unknown how much the youth bus pass will cost if it’s made permanent, staff say the cost could range from hundreds of thousands of dollars up to $12 million.

The uncertainty of how to pay for the discounted senior bus tickets was too much for Mayor Matt Brown.

“This is the first time in four years, four years of budgets, that I’ve heard the term budget bomb,” said Brown.

While Morgan put forward the option of including the discounted senior bus tickets as part of the pilot project, it wasn’t the only option suggested. Morgan argued city council could add the cost to the tax levy without impacting the end result. He also took issue with the budget bomb discussion.

“What I don’t appreciate is saying that adding $250,000 to a $12 million hole is now a budget bomb, when $12 million isn’t. That’s not reality,” said Morgan.

Morgan’s motion lost 5-6 with Michael van Holst, Bill Armstrong, Squire and Usher voting along with Morgan and Brown, Jesse Helmer, Maureen Cassidy, Paul Hubert, Anna Hopkins and Stephen Turner voting against. Mo Salih, Virginia Ridley, Tanya Park and Jared Zaifman weren’t present for the vote.

The seniors discount will officially end Jan. 31, 2018.

The 2018 budget is the last one done by this council group. The next council will approve the 2019 budget next year following the municipal election.

The 2.8 per cent tax hike for 2018 follows a 2.9 per cent hike in 2017 and 2.5 per cent increases in 2015 and 2016.

The 2018 hike means the average homeowner, with a house assessed at $221,000, will pay an extra $77 next year. When water and sewer rates are factored in, that figure increases to $102.

City politicians started the budget process with a possible tax hike of 3.3 per cent, higher than what was initially projected through the multi-year budget process.

Ontario’s decision to raise the minimum wage to $14 in 2018 applied increased pressure to London’s bottom line.

City council was able to make it work by 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.

“This multi-year budget system allows us hold the line on increases while streamlining the overall system. It allows for planning and foresight,” said Brown in a release. “We’ve set targets in this multi-year budget and stuck to them. Thank you to council, city staff and those who’ve worked to find cost savings through this process.”

The 2018 budget includes a gross operating budget of $920 million and a capital budget of $159 million.

To review the budget, click here.