Hamilton, Ont.’s general manager of finance revealed budgetary pressures connected with housing and homelessness as just a few significant challenges likely to aggravate the city’s efforts to shrink a 14.2 percent preliminary property tax increase next year.
Mike Zegarac said targeted investments in crisis areas like housing and climate change, as well as inflation plus so-called “downloading” from the province and federal governments are examples of complications councillors will have to navigate through in the months ahead.
In a presentation Wedneaday, he estimated close to four per cent of the 14.2-per cent relates to housing issues including the covering of changes in development charge exemptions and other legislated impacts from Ontario’s Bill 23.
“We’ll speak to $30 million in investments being referred through the Housing and Homelessness strategy,” Zegarac said.
“But then there’s a development charge exemption component that’s real in terms of housing. These are costs that not-for-profit and other housing providers will not have to bear that existing taxpayers and ratepayers (will.)”
The absence of COVID relief funds from the other two levels of government the city factored into its last couple of budgets is also an estimated $14-million hole that will need to be filled.
“So creating a pressure in 2023 of $10 million and looking forward to 2024, no COVID-related funding programs,” Zegarac explained.
“So that is something that in terms of … other sources of revenue is affecting us in-year and it is an impact in terms of 2024.”
Additionally, the city is dealing with unprecedented inflation which Zegarac characterized as “very different” from what’s been seen in previous years
“We have the costs associated with inflation in terms of expenditures, whether those are collective agreements, whether it’s contracts or whether it’s energy,” he said.
“But … we haven’t a revenue tool that adjusts with inflation like HST or land transfer tax.”
Prior to Wednesday’s general issues committee, Mayor Andrea Horwath told Global News that dipping into a city reserve fund is one financial tool available to lower taxes but wondered if the timing to leverage it was right.
“So it may be time to look at some of those things like the reserves, etc. to see what we can do to cushion the blow,” Horwath suggested.
“But that’s not something that can be done every year, right? It’s not a sustainable yearly annual way to deal with things.”
Budget talks will see engagement with public delegations in early November and continue until February in a bid to whittle down the increase.