posting
06-17-2008, 09:17 AM
Tax hike could be steep
Review predicts increase of more than 6% in 2009
The Whig Standard 2008-06-17
The rising price of oil and the cost of new municipal services could see Kingston ratepayers facing one of the highest tax increases in the past 10 years.
City hall's finance department predicted the tax increase for 2009 to be around three per cent, but a review of those forecasts has shown that service pressures could force a tax increase of almost 6.5 per cent.
That would equate to about $2,770 for the average tax bill, an increase of about $170 over 2008.
The tax burden could get even worse in the coming years as city councillors decide whether to approve new major projects, such as a 50-metre pool, a revamped Memorial Centre and a new community centre in the Cataraqui Woods subdivision. According to a report to council this week, the message is build them and ye shall pay.
In total, the finance department estimates city taxpayers over the next 10 years will have to cover almost $130 million to pay for all the "nice to have" projects on the city's agenda.
"We probably can't do all of them," said Desiree Kennedy, director of financial services.
City councillors will have to decide what to forge ahead with and also give staff some direction on next year's tax increase. Each project, if approved, would likely require a tax increase to pay for it, the report notes.
Mayor Harvey Rosen said council needs to set its priorities so it knows what it can afford to take on.
"We've got to be aware of our limited resources now," he said. "I don't think we can afford to pursue all of these. "We' re supposed to be looking at being sustainable," he said later. The current picture for the future, he said, "is not what I would call sustainable if you want to control property taxes."
Councillor Dorothy Hector said the city should hold public meetings to give residents a complete picture of the city's financial state to see what projects are considered a priority with ratepayers.
"The expectation that everything is possible and immediately has got to be tempered. We have to really look at the whole picture and plan it out," said Hector.
Part of the plan includes the continuation of a one-per-cent yearly tax increase to pay for work on city infrastructure. The city, Kennedy said, isn't spending enough on repairing its current infrastructure and will likely take a decade to close the gap.
Next year, the city is committed to an additional $653,000 in spending to cover the cost of affordable housing and an organic waste program that will cost an estimated $465,000.
However, the city has budgetary pressures from the rising cost of fuel and the police department that could drive up the tax increase into the 6.5-per-cent range.
According to the finance department report, an additional $400,000 may need to be spent to cover the cost of diesel for city buses and $2 million for the Kingston Police, which includes money for new hires that was removed from the 2008 budget.
There is also the possibility of a phased-in tax increase to pay for a 50-metre pool and aquatic facility. That increase would only occur if council proceeds with the project.
The additional pressures on the budget amount to $3.75 million in spending that taxpayers will have to cover.
The 2009 tax increase doesn't include the $16-million hospital donation, approved this year, which boosts the tax burden by one-third of a percentage point.
The report notes there is another option if council wants to hold the line on tax increases, including letting residents know that new services don't come without a cost.
The report also suggests councillors may want to review services to see if any can be cut to save cash.
"While it can always be argued that service levels be increased it should also be recognized that expectations need to be managed," the report states.
Kennedy said the city would likely have to look at service cuts if councillors decided to keep the tax increase lower than 6.5 per cent.
Rosen said city councillors haven't looked hard enough at ways to increase city income outside of property taxes.
Three years ago, the city conducted a review of city services to identify which ones could be cut. One of those service cuts included the closure of the campground at Lake Ontario Park, something this council has looked at bringing back.
Councillor Ed Smith, who chaired the service review committee, said it may be wise to conduct another review to see if any services have passed their usefulness. A review, he said, wouldn't be easy.
"Whenever you look at existing services, it's always difficult ... to reduce or eliminate an existing service," Smith said.
Review predicts increase of more than 6% in 2009
The Whig Standard 2008-06-17
The rising price of oil and the cost of new municipal services could see Kingston ratepayers facing one of the highest tax increases in the past 10 years.
City hall's finance department predicted the tax increase for 2009 to be around three per cent, but a review of those forecasts has shown that service pressures could force a tax increase of almost 6.5 per cent.
That would equate to about $2,770 for the average tax bill, an increase of about $170 over 2008.
The tax burden could get even worse in the coming years as city councillors decide whether to approve new major projects, such as a 50-metre pool, a revamped Memorial Centre and a new community centre in the Cataraqui Woods subdivision. According to a report to council this week, the message is build them and ye shall pay.
In total, the finance department estimates city taxpayers over the next 10 years will have to cover almost $130 million to pay for all the "nice to have" projects on the city's agenda.
"We probably can't do all of them," said Desiree Kennedy, director of financial services.
City councillors will have to decide what to forge ahead with and also give staff some direction on next year's tax increase. Each project, if approved, would likely require a tax increase to pay for it, the report notes.
Mayor Harvey Rosen said council needs to set its priorities so it knows what it can afford to take on.
"We've got to be aware of our limited resources now," he said. "I don't think we can afford to pursue all of these. "We' re supposed to be looking at being sustainable," he said later. The current picture for the future, he said, "is not what I would call sustainable if you want to control property taxes."
Councillor Dorothy Hector said the city should hold public meetings to give residents a complete picture of the city's financial state to see what projects are considered a priority with ratepayers.
"The expectation that everything is possible and immediately has got to be tempered. We have to really look at the whole picture and plan it out," said Hector.
Part of the plan includes the continuation of a one-per-cent yearly tax increase to pay for work on city infrastructure. The city, Kennedy said, isn't spending enough on repairing its current infrastructure and will likely take a decade to close the gap.
Next year, the city is committed to an additional $653,000 in spending to cover the cost of affordable housing and an organic waste program that will cost an estimated $465,000.
However, the city has budgetary pressures from the rising cost of fuel and the police department that could drive up the tax increase into the 6.5-per-cent range.
According to the finance department report, an additional $400,000 may need to be spent to cover the cost of diesel for city buses and $2 million for the Kingston Police, which includes money for new hires that was removed from the 2008 budget.
There is also the possibility of a phased-in tax increase to pay for a 50-metre pool and aquatic facility. That increase would only occur if council proceeds with the project.
The additional pressures on the budget amount to $3.75 million in spending that taxpayers will have to cover.
The 2009 tax increase doesn't include the $16-million hospital donation, approved this year, which boosts the tax burden by one-third of a percentage point.
The report notes there is another option if council wants to hold the line on tax increases, including letting residents know that new services don't come without a cost.
The report also suggests councillors may want to review services to see if any can be cut to save cash.
"While it can always be argued that service levels be increased it should also be recognized that expectations need to be managed," the report states.
Kennedy said the city would likely have to look at service cuts if councillors decided to keep the tax increase lower than 6.5 per cent.
Rosen said city councillors haven't looked hard enough at ways to increase city income outside of property taxes.
Three years ago, the city conducted a review of city services to identify which ones could be cut. One of those service cuts included the closure of the campground at Lake Ontario Park, something this council has looked at bringing back.
Councillor Ed Smith, who chaired the service review committee, said it may be wise to conduct another review to see if any services have passed their usefulness. A review, he said, wouldn't be easy.
"Whenever you look at existing services, it's always difficult ... to reduce or eliminate an existing service," Smith said.