The city treasurer presented council with a report on projected property tax targets for the 2013 – 2017. The report indicates preliminary budget targets from city services, boards and commissions project a property tax increase of 5.5% for 2013. The treasurer through discussions with service sectors reduced the target to 3.8% with targets over the next three years of approximately 3.2% each year.
Challenges facing the city’s finances are numerous. Over $300 million of the budget is attributed to labour costs. A 2% increase in salaries, wages and benefits equates to $6 million increase in property taxes, or approximately 1.4% tax increase. The Ontario Works caseload is anticipated to remain at a high level given the uncertain economic factors. The Ontario Municipal Employees Retirement System (OMERS) sponsor corporation identified a rate contribution increase of $1.4 million for 2013. The roads and transportation division have identified that road and infrastructure repair is falling behind by $5-6 million per year. It is not anticipated that senior levels of government will assist with an influx of tax dollars. Emerald Ash Borer is devastating the urban tree canopy. Approximately 10,000 ash trees in declining health are on city boulevards. The removal and replacement will require an additional $1 million to the base budget. The Mayor wants to establish an economic levy which will be used for new capital projects. How this will be funded is not known but may include a tax increase.
The report also outlines a comparison of London property taxes other cities as rated in the annual BMA Management Consulting 2011 report. For residential taxes London is below the comparable group average. For commercial property taxes London is the lowest of all comparable municipalities. In the Industrial class we are third lowest of the group comparison.
In response to the treasurers report council requested staff bring information as to the implications of a 3.8% budget increase, a 2% budget increase and a 0% budget increase. We expect to see this report in late June or early July.
The full treasurer’s budget report can be found at the following link: http://bit.ly/IhzA6s