I don’t think a 4% increase is necessary

A lot of people have been asking me what I think of our new council and my immediate response is, “it is early days yet.”
In other words I want to give them some time to get their feet under them. Right now, I think they are just learning the ropes and they haven’t built up the confidence they need to push forward with their agendas and the promises they made during the campaign.
Having said that, the budget is an extremely important document which will have a direct impact on all of us.
During the three-day budget negotiations when council members had an opportunity to address the suggestions made by staff in the budget, I watched very closely and listened intently to the responses.
They spent a lot of time discussing the capital expenditures of approximately $14.8 million and barely skipped over the operations budget which totals over $37.3 million.
Council seemed reluctant to dig too deep into the area of operations (even though many of us believe there is some fat there that could be trimmed) and instead tried to find ways to pay for capital expenses without adding to the tax burden.
Georgina has a reserve fund of around $18 million and council dipped into it a few times to fund various capital expenditures which otherwise would have been added to the tax levy. The other fund they chose to access was the monies Georgina receives annually from the Federal Government’s gas tax initiative which nets the municipality approximately $1.2 million a year. (Georgina has gas tax reserves of approximately $5 million.)
Now, the gas tax is essentially free money which the municipality can use to augment and supplement the tax money they use for capital expenditures. However, it shouldn’t be used to replace tax levy support and so the Town must make sure that its level of spending using tax dollars remains at an acceptable level so as not to jeopardize its gas tax allotment.
During the negotiations, council had approved gas tax funding to support two major capital expenditures until Treasurer Rebecca Mathewson recommended that property taxes fund these purchases. Ms. Mathewson demonstrated that capital tax levy spending for the years 2010 to 2014 had been consistently falling and told council this trend could compromise the gas tax allocations if it continued.
However, according to the Gas Tax Agreement, the baseline years that should be used to calculate tax levy capital expenditures are the five years from 2000 to 2004. By using these years as the baseline, it lowers the threshold of acceptable tax levy support and gives the Town an opportunity to include more gas tax dollars into its budget. So without confusing the issue more, it is my opinion that she spooked council by suggesting gas tax allocations could be compromised if they didn’t raise the level of tax funded expenditures to $1.3 million from the $598,000 they had approved. That ultimately pushed the tax rate up by about two per cent.

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2 Responses to I don’t think a 4% increase is necessary

  1. Jack c says:

    This new mayor and council make we want grossi back

  2. I think the “100 days” honeymoon period is over.

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