Region looks at a 5.3 per cent hike as budget process starts
By Bill Rea

In an effort to cushion blows in future tax increases, York Regional councillors Thursday were handed a staff proposal for a 5.3 per cent hike this year.

That news was not received well by some Regional councillors, while King Mayor Margaret Black wasn't quite as harsh. "I was expecting it to be much higher," she declared.

This was staff 's first budget presentation to this council, delayed because 2006 was an election year.

Finance Commissioner Lloyd Russell told councillors staff was looking at gross operating expenditures this year of $1.2 billion (almost $660 million of which is to be financed by taxes) and gross capital spending of $564.1 million. As well, there are plans for new debt financing to the tune of $273 million.

Addressing capital budget issues, Russell said staff is looking in its forecast to some $7.6 billion in spending over the next 10 years, and about half of that will be going to toward transit and rapid transit, as well as a significant amount to water and sewers. He also pointed out that forecast is about $1.7 billion more than the 10-year projection offered last year, as a number of factors have driven up the numbers, including about $800 million for a subway. Development charges are expected to pick up a good chunk of these expenditures, but a little more than $2.1 billion will come from the taxes.

Russell explained staff was trying to address the rehabilitation and replacement of capital assets in its projections, as well as costs that will be related to anticipated growth.

Water and sewer expenses are going to account for a little more than half of the proposed capital expenditure for this year, with transit and roads taking significant chunks, in keeping with the traffic congestion woes.

The major local roadwork projects planned include Bathurst Street, from the 17th to 19th Sideroads.

Resurfacing projects include Keele Street, from Teston to Station Roads; Weston Road, from King/Vaughan Townline to King Road; and Jane Street, from Teston Road to Highway 9.

As well, the capital budget proposals call for one new ambulance and the replacement of nine others, replacement of three paramedic response units, a 50-unit affordable-housing apartment building, and 19 new police cars and the replacement of 114 others.

Russell said staff was suggesting a one per cent annual contribution to a capital asset management plan, and another one per cent to a "pay-as-you-go" plan. He said this "debt reduction strategy" would reduce the Region's debt load by about $120 million over the next 10 years, and that did not take compounding into account.

Tony Haddad, director of business planning and budgets for the Region, told councillors there are a number of factors driving the operating budget, including impacts from the capital budget and program cost pressures.

The $1.2 billion in planned operating spending is about 10 per cent more than was budgeted last year, and the $659.9 million that will have to be raised to pay for that represents an 8.6 per cent increase. That figure is offset, however, by a 3.3 per cent increase in assessment, which cuts the tax increase back to 5.3 per cent.

He also offered some estimates of what tax hikes might look like in the next couple of years, factoring in proposed spending and anticipated assessment growth. It amounted to 9.9 per cent in 2008, 6.5 per cent in '09 and 8.5 per cent in '10.

Haddad said that from this year's budget, the Region expects to maintain 3,473 lane kilometres of road and 716 traffic signals; provide a total of 768,200 hours of transit service; manage more than 326,000 tonnes of solid waste; provide employment and financial support to an average monthly caseload of more than 5,000; subsidies for almost 2,900 child-care spaces, etc.

Stating that the average home in York is assessed at $372,000, Haddad said the proposal is to $1,798 from each household, amounting to an increase of $91 for the average home.

Russell said staff is looking to have the full budget approved at council's April 19 meeting.

There were varying reactions to the staff presentation from around the council table.

"I sort of like what I see here," remarked Georgina Councillor Danny Wheeler commented, adding he liked the idea of a "pay-as-yougo" plan. He added he doesn't like the idea of owing money and hoped this would soften tax blows in future years.

But Vaughan Councillor Gino Rosati was of a different mind, stating he couldn't support a tax increase in excess of the inflation rate, which he said is about two per cent. He pointed out most taxpayers don't get 5.3 per cent raises every year.

Regional Chair Bill Fisch said he was confident Rosati would work hard to reduce and prioritize during the budget process, although he added there are more details that council has to see.

"Your point's welltaken," he told Rosati. "It will be our decision as a collective council."

Georgina Mayor Robert Grossi was concerned about staff projections that taxes are slated to increase by some 30 per cent by 2010, as he wondered how he was going to sell something like that to his constituents. He suggested this might be the time for staff to come back with a flat-line budget.

Fisch commented that illustrates the need to restructure the current arrangements between the Province and municipalities, calling the current situation "unsustainable."

He added a 5.3 per cent tax increase this year is "problematic."

"I don't think the senior levels of government understand," Grossi observed.

Fisch also pointed out staff was "telling it as it is," adding it's up to councillors to review and make a decision.

"It's a necessity to deal with it at other levels of government," he remarked.

Although Black was pleased the proposed tax hike was as low as it is, she said she agrees with the philosophy that they should be as close to the inflation rate as possible.

But she also realized that reducing the tax increases this year could mean a much bigger hit in '09.

Black pointed out neither the federal or provincial governments have done much to help maintain municipal infrastructure. She said Public Infrastructure Renewal Minister David Caplan recently announced a large allocation, "to which I would like to respond, 'Where's our share?'"

"We can't count on getting any funding from the other levels of government," Black declared.

The Region traditionally takes the largest chunk of the municipal taxes paid in King. While the Township collects the taxes, it is also responsible for passing on shares to the Region and two local school boards.

Township Treasurer Don Young reported last year King only kept 30.24 per cent of the taxes it collected. Of the rest, 42.16 went to the Region and the remaining 27.6 per cent went to education.