Municipal_budget_09-15

Jeff Green | Apr 16, 2009

Notes on Municipal Budgets

Central Frontenac BudgetNorth Frontenac Budget

Municipal councils throughout the region have been struggling with their 2009 budgets over the past few weeks, with most of them nearing completion of the process.

Evaluating municipal budgets is difficult because there are a number of factors that contribute to the ultimate result for ratepayers: a tax bill that either goes down, or most often, goes up.

Tax bills are made up of three charges, which are all added together. The first charge, making up 22%, is for education taxes. The province collects this money, and it is set to collect the same amount in 2009 as it did in 2008. The second charge, making up 21% of the total, is for county taxes. Frontenac County has raised municipal taxes by 2.9% this year.

So, when township councils began to work on their own budget, which makes up 57% of residential tax bills, there was already a slight increase in the number of dollars they would be taking from ratepayers.

Municipal councils have very little in the way of fiscal leeway to work with. Unlike federal and provincial governments, they cannot run deficits, and there are new regulations each year from the provincial government that must be dealt with - regulations that cost money to live up to. And then there are rising fuel and other costs, as well as increased expectations from ratepayers.

On the other hand, local municipalities have the benefit of very limited real growth in their tax base. For example, the treasurer in Central Frontenac estimated that tax assessment increases that are due to growth in the township totals about 1% this year.

In the end, municipal councils have found it difficult this year to keep the increase in the levy they end up charging to ratepayers under the standard 3% inflationary increase.

In our reporting on budget debates this year we have focused on the levy to ratepayers, which in the case of North Frontenac has risen by $265,000, or 7.7%. On average, North Frontenac ratepayers will pay 7.7% more for local services, in addition to an increase in what they pay for county services.

There is an added factor in municipal taxes that has nothing to do with the decisions that councils make, but affects how much people end up paying in a big way, and that is municipal assessment. Every property owner in Ontario received an assessment notice in October, and it determines our share in paying for the overall municipal budget.

The increase varies from property owner to property owner, but the general trend is for waterfront property to rise more than non-waterfront properties, so if you are reading this while overlooking a field you will likely see a moderate or no tax increase this year, but if you are looking out on the lake, you could be facing a much larger increase.

The impact of property assessment is so great on the amount people pay that it dwarfs that of the levy increase.

Take North Frontenac Township as an example. Education taxes, which have been frozen on a province-wide basis, will go up for most North Frontenac residents because the average property assessment in North Frontenac has gone up by more than the provincial average - 7% more. The county levy is up by 2.9%, as mentioned, and the municipal levy is up by 7.7%

So, for people whose property assessment stayed the same, taxes will go down, but for most people taxes will go up, and for some, taxes will go up a lot.