THUNDER BAY – City council has locked in this year’s budget with a gross tax levy increase of 3.13 per cent, despite a last minute attempt to use an additional nearly $900,000 to further offset the increased spending.
The budget, which will require an additional $5.75 million from the municipal tax base compared to the previous year, was ratified by council on Monday night.
With city administration determining an additional tax generating power of $1.3 million through growth, the net levy increase to existing taxpayers is 2.42 per cent. That amount is equal to the city’s eight-year average.
Coun. Frank Pullia, the city’s budget chair, said a fair and equitable plan was achieved.
“We have a well balanced budget that has added services and still maintained that fiscal responsibility we committed to,” Pullia said. “I think this is a good budget. It provides enough flexibility for us to move forward in a positive way and provides a little more flexibility to our administration.”
The starting point for the proposed budget had a gross levy increase of 3.61 per cent, an amount that was most significantly trimmed down last week when council went against the recommendation of administration and redirected $1.125 million of projected 2017 surplus dollars to offset the hit to taxpayers.
But Coun. Trevor Giertuga insisted that wasn’t enough, advocating for $2 million of the forecasted $2.8 million positive variance to be put against the budget.
“If you went to a store and you purchased something and got home and realized you were overcharged and you went back to the store and said ‘I was overcharged $200’ and the store said, ‘well I’m going to keep that money in case you want to buy something new or in case you need it later down the road. Would we find that acceptable? I wouldn’t,” Giertuga said.
The impact of the $1.125 million levy offset last week was calculated to be a saving of a little more than $22 for the median household. Adding the nearly $900,000 would have brought the net levy increase to 1.95 per cent.
That suggestion had little traction with his colleagues, many of whom had their own ideas of how to best use those dollars.
Coun. Joe Virdiramo echoed a proposal he pitched last week for the surplus to help address the city’s infrastructure deficit.
“We’ll continue to get further and further behind in our infrastructure and eventually instead of being a two per cent or 2.42 per cent tax increase, it’s going to be five, six, seven, eight per cent because we’re falling behind just to make one year look better than the other,” Virdiramo said.
Others said they would rather see that money remain in the stabilization reserve fund as recommended by administration, especially with the budget already lowering that account by a net of $4.4 million.
“I think it’s very wise to make sure our reserves are actually increased instead of dipping further into them,” Coun. Paul Pugh said.
“I think it’s short sighted and it’s less we have today but if we don’t worry about tomorrow then someday somebody is going to hold us accountable for the decisions we made today that didn’t incorporate tomorrow.”
Giertuga, along with Coun. Rebecca Johnson and Coun. Larry Hebert, were the three dissenting votes against the budget.
Water and sewer rates will each increase by three per cent, bringing the proposed total sewer and water annual costs to $1,151 for the average household.
The tax levy is the total amount of money required to be collected from municipal taxpayers and does not reflect changes to property taxes.
