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City hall's pre-COVID budget in a post-COVID world
LONDON, ONT. -- Local businesses facing an upcoming property tax increase worry it will only add to the financial blow delivered by the COVID-19 pandemic.
“It’s our money and the buck truly stops with us,” says Jerry Pribil, owner of Marienbad Restaurant and Chaucer’s Pub.
Pribil calls COVID-19 a financial disaster for many London businesses, and a steep hike to property tax bills will only make it worse.
“It will impact us tremendously, the last two years already had tremendous increases, so I would say COVID is potentially for some of us the last straw.”
He is calling on city council to provide immediate tax relief for commercial businesses.
Last month, council approved a 4.4 per cent tax rate increase in the 2020 municipal budget.
Next week council members will consider adjusting tax ratios which divide the tax burden between property classes including residential, commercial and industrial.
Staff recommend an even distribution, which would result in an average residential tax increase of 2.6 per cent.
Commercial rates would climb 4.9 per cent.
“Some of these businesses are going to close their doors and never reopen,” worries Councillor Shawn Lewis. “The (city’s) budget we approved in March was ‘B.C.’ - before COVID.”
Lewis says re-examining some non-essential projects in the 2020 budget, like bistro chairs for downtown, could see money redirected to tax relief.
“I think we have to look at some targeted places in the budget, I don’t think we have to look at the whole thing.”
But after consulting with civic administration, Mayor Ed Holder says,”We have to leave 2020 alone, but have to take a hard look at 2021 to see what we can do, 'cause there’s already so much that’s been put in place.”
Budget Chair Josh Morgan says a solution for local businesses lies in a provincial plan to upload education taxes paid by commercial properties.
The councillor is frustrated the program stalled a few years ago, “If they completed that upload program, it would reduce business taxes in the city by seven per cent. It would be an additional $10 million benefit.”
City Hall’s Corporate Services Committee will discuss tax ratios and final tax bills next week.