A dire financial projection has been presented to Hamilton politicians, as a result of the COVID-19 pandemic.
In his best case scenario, Mike Zegarac, Hamilton’s general manager of finance, is forecasting that a three month lockdown ending June 30, followed by a six-month recovery period that allows for a resumption of municipal services would result in a 2020 budget deficit of $61.6 million.
A second scenario, if the lockdown were to last nine months and be followed by a one-year recovery period through the end of 2021, estimates a $122-million deficit.
Zegarac says the projections are meant to support the city’s appeal for financial assistance by “informing senior levels of government of the immediate need.”
Hamilton Mayor Fred Eisenberger says he remains optimistic that federal and provincial funding is on the way, indicating that the upper levels are in a “standoff over jurisdiction.”
If federal and provincial funding doesn’t come through, Zegarac’s report puts a number of cost-cutting measures on the table, including the delay or cancellation of more than $29 million worth of capital projects and the introduction of a one-time coronavirus tax hike of between 7 and 13 per cent.
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Ward 5 Coun. Chad Collins says it’s “prudent” to have that supplemental plan in place, even though “we can wait another couple of months.”
Ward 4 Coun. Sam Merulla agrees that “we shouldn’t commit to any stategy” until we find out what’s coming from the federal and provincial governments.
Hamilton’s budget pressures result from extra costs in areas like housing and public health, and lower revenues primarily involving transit and recreational programs.
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