Provincial cuts leave London council facing a $3 million hole

Facing some tough budget decisions due to provincial downloading, London city council endorsed a staff recommendation to set 2.7 per cent as the target for annual property tax increases for the 2020-2023 budget.

In her presentation to council, city treasurer Anna Lisa Barbon said setting 2.7 per cent as a "target for planning purposes" over the four years is needed to maintain city services at current levels and implement the city's strategic plan with some provincial cuts announced and more possibly looming. 

The first draft of the budget isn't due to be tabled until December, but staff put forward the update as an early warning to council.

A big factor in the budget pressure is provincial cuts to public health, policing, library services, child care, tourism and flood management.

Last week, 27 Ontario mayors slammed the province for downloading costs that leave municipalities to choose between tax hikes or service reductions.

Barbon said staff are aware of a $3 million impact due to provincial downloading in this year's budget, which amounts to a .5 increase to the property tax levy. But she also said staff are still sorting through new information about how elements of the provincial budget could affect the city's bottom line.

"We're currently trying to go through all the impacts," she said. "At this time, we know a number of 2019 impacts, we don't know what the 2020 impacts are yet. They're starting to come to light, even today there was new information." 

Some feel target is too high

Although council voted to accept the staff recommendations, it wasn't unanimous. It passed by a 12-3 vote with councillors Phil Squire, Paul Van Meerbergen and Steven Hillier voting against.

Van Meerbergen said the 2.7 target rate was too high and instead wanted a target in line with the rate of inflation. 

But budget chair Josh Morgan pointed out that the 2.7 per cent number was only a starting point, and that passing it as a target doesn't mean that's the increase council wants to see. 

"No one is going to come in at the target if we can find a way to come under the target," he said. "It feels a little bit awkward to set a target this early but the purpose of setting a target is to give our staff a framework to do some work on this." 

The staff recommendation also calls for a review of service areas to continue.

Also, there's an engagement plan to allow the public to weigh in before the budget is tabled in December.