Taxes and City Finances
I sit on the Budget Committee of Council. Over the past two years we have managed to keep city property tax increases at or below the rate of inflation. This means unfortunately that not every great idea can be funded. With the help of city staff, we prioritize spending decisions. I think it is fair to say that, while not every department in the city is appropriately funded or staffed, over all the city runs fairly lean relative to other GTA municipalities. This means that prioritization is even more important. We simply don’t have the capacity some of us might prefer.
The city is also very good at sourcing funds from other places. In 2019 we received a commitment from the federal government of $48 million to mitigate the impact of flooding in Markham. This will help accelerate flood mitigation work across the city, including Unionville. (Work in Thornhill is well underway.)
We also maintain a 25-year Life-cycle Reserve. This fund has sufficient funds to pay for maintenance of all City assets (roads, buildings, community centres, parks . . . ) for the next 25 years. Each year a portion of your tax increase goes into maintaining this fund. There are very few other municipalities that maintain such reserves. They help protect us and our children from future fiscal shocks like the 5% tax increases we see in some other GTA municipalities.
I do have a concern about our Development Charge (DC) reserves. These are the fees paid by developers, and ultimately the purchasers of new homes, to cover the new roads, sewers, community centres and other city infrastructure to support the new homes. — Growth should pay for growth!
The DC reserve is currently in deficit (covered by internal borrowing from other reserves). Some of this is justified as we pay for some infrastructure in advance of development and the payment of DCs. However, this also means that we have no money to pay for a new community centre in the northwest part of the city. It is needed now – Angus Glen is at capacity and the new Aaniin Community Centre was at capacity the moment it opened its doors.
Of more immediate concern it the impact of Covid-19 on the City’s finances. Council receives monthly updates from the City treasurer. To date the burden seems to be manageable though tax revenues are down slightly as we have waived late payment and interest charges on property taxes until December 31, 2020. At the time of writing (July 9, 2020) we are projecting a shortfall of about $27 million in 2020. This can probably be financed through internal reserves but the books will ultimately need to be balanced through property tax and fee increases and/or significant service cuts. Municipalities across Canada are lobbying the provinces and the federal government for financial support.
In 2020, at the suggestion of a local resident (and a great one at that), I will establish a small Ward 3 committee to help me review the 2021 budget. The heavy lifting on that will begin in September 2020.