Budget season arrives early for London city politicians

London City Hall as seen June 14, 2017. (Matthew Trevithick/AM980)

London city politicians will get an early start on budget talks Monday.

Full council will meet as part of the strategic priorities and policy committee to discuss the city budget, with provincial downloading and a review of city spending likely to get the most attention.

After city hall set a target of 2.7 per cent for annual tax increases for the upcoming multi-year budget, which is set to run from 2020-2023, the province announced $6.6 million in provincial downloading. That pushes the starting point for budget talks in 2020 to 3.1 per cent.

READ MORE: London expecting $900k less in 2019 funding after province backtracks on budget cuts

For context, every six million dollars represents one per cent on the tax levy.

Budget chair and Ward 7 Coun. Josh Morgan told 980 CFPL this meeting will set the stage for budget talks later this year.

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“Council has asked for this meeting for us to review current service levels and provide councillors to dig into those, to make suggestions, to have stuff brought back to the budget process. Whether or not this alleviates or changes any of that will be a function of what ideas the councillors bring to the table,” he said.

Back in May city staff recommended a 2.7 per cent tax increase. 2.2 per cent of that would be to maintain current service levels while the remaining 0.5 per cent would be for additional investments in priorities outlined in the 2019-2023 Strategic Plan.

READ MORE: City Hall looks for input from Londoners during multi-year budget planning

London has an annual budget of $971.5 million.

There is an air of uncertainty surrounding the start of budget talks.

A starting point of 3.1 per cent for a tax increase would include maintaining current service levels and provincial downloading, but not priorities from the strategic plan. That could lead to some hard decisions between city services, provincial downloading and initiatives from the strategic plan.

“These new initiatives and new things that are being added on, we have to find space for. One of the ways to do that is to potentially dig into that 2.2 per cent,” said Morgan.

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READ MORE: London city councillors talk property tax hikes, impact of provincial cuts on multi-year budget

Also adding to the uncertainty is transit funding. Last month the province announced $103.5 million in funding for transit projects in the city, including bus rapid transit. That was lower than the $125 million the city requested. The federal government is currently reviewing the business case. What won’t be including in transit funding is land acquisition costs, potentially leaving city hall with a $50 million hole to fill.

“We’re halfway through a review, we know what the province wants to fund, we know what we expect the municipal contribution to be,” said Morgan. “What we don’t is the results of the federal review and to what level they’re going to fund the different initiatives that have been submitted so far.”

London city hall could look to find some savings via service reviews, however $4 million in savings have already been found between 2015-2019. The staff report identifies another potential $1.1 million in permanent budget reductions that could be available during budget talks.

Nothing will be decided at Monday’s meeting. It will set the stage for multi-year budget talks this fall.

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