Mayor Morgan not expecting to use his veto power after budget deliberations set 8.7% tax hike

It will cost a lot more to live in London, Ont. this year.

 

On Thursday, council’s final day deliberating the 2024-2027 municipal budget concluded with some additional funding for transit and library services, but the increase to this year’s tax rate crept only slightly higher to 8.7 per cent.

 

An 8.7 per cent tax increase corresponds to $286 more on the average home’s property tax bill.

 

In addition, the water rate will rise 2.5 per cent ($13 per average annual bill) and wastewater charges will rise 4 per cent ($28 per average annual bill).

 

In total, the average homeowner will pay $327 more this year than in 2023.

 

“There were many, many, many ‘no’s’ in this budget process, but I recognize that the tax increase is high,” Mayor Josh Morgan told CTV News after the meeting.

 

The mayor’s budget proposal launched the process with a proposed 8.8 per cent increase, but several amendments by council resulted in mostly minor adjustments to spending.

 

Morgan isn’t expecting to use his strong-mayor power to veto any of the changes made by council.

 

“Not at this time, but we’re not done the process yet,” he explained. “There’s no substantively large item in here that I have any concerns [about].”

 

The most substantive council amendment of the day was a political u-turn in support of a request by London Transit to increase service hours and frequency of city buses— but ultimately the cost won’t land on tax bills.

 

A week after the budget committee narrowly rejected a single increase of 18,000 service hours starting this year, Coun. Jerry Pribil proposed adding 18,000 more hours each of the next four years.

 

“We don’t have any alternatives, I do believe that this is an essential need,” urged Coun. David Ferreira.

 

But Deputy Mayor Shawn Lewis balked at adding about $1.65 million more each year to tax bills, “I’m not putting this on the tax base, you’ve seen what the impact is.”

 

The additional service hours were supported by a slim majority, but later Lewis proposed a different source of funding.

 

He proposed reducing annual contributions to the Climate Emergency Action Plan Reserve Fund down to $1 million to offset the higher transit cost.

 

“Contributing less to a reserve fund right now, because we have chosen to spend immediately on transit, makes a lot of sense to me,” he argued.

 

However, several councillors worried the change was clawing back financial resources for future climate change initiatives.

 

“I will not be supporting this because I think we actually need to be making progress on our climate targets,” Coun. Skylar Franke told colleagues.

 

Lewis’ amendment to use some of the reserve fund contribution was approved 11 to 4.

 

A revised funding request from the Library Board sought more funding each year than allocated by the mayor’s budget, but less than the original business case.

 

“I can’t stress how much this funding is needed at this time,” implored Coun. Corrine Rahman.

 

“We need to focus on our base budget right now, and right now we can’t afford this,” countered Coun. Peter Cuddy, who sits on the Library Board.

 

Ultimately, council backed $331,000 more this year— but held to the mayor’s recommended funding increases in 2025, 2026, and 2027.

 

Morgan suggested the board will have to justify a need for more money in future years, “I could get there, but I’m not going to move [on] the rest until we have meaningful dialogue with the London Public Library Board.”

 

Meanwhile, a pitch by Coun. Franke to redirect about $2 million away from the police budget and towards additional housing initiatives fell short.

 

She said that pro-active investments that keep more people from becoming homeless would reduced demand on the London Police Service.

 

“It seems like there is the elephant in the room, that we don’t even talk about the business cases that the police have provided us,” said Coun. Anna Hopkins.

 

“Any cut to the budget would compromise our ability to ensure adequate and effective policing in this city,” replied Deputy Chief Trish McIntyre to a question about the impact.

 

“I was really hopeful that the conversation with police would have had them coming with some changes and the realization of some savings,” lamented Rahman.

 

“This isn’t a wish list, this isn’t a dream list, this is what is needed to create a safer city now,” countered Coun. Susan Stevenson.

 

Worried about the discussion pitting public safety against homelessness, the mayor said both are priorities, “Yes there’s money for public safety, but yes there’s significant funding for housing.”

 

Ultimately, the redirection of funds from the police budget failed 12 to 3.

 

A public participation meeting on the budget is scheduled on Feb. 27 at city hall.

 

On Feb. 29, councillors will have one final opportunity to propose changes prior to finalizing the 2024 budget.

 

The mayor said while this year’s decisions will be locked in, the multi-year budgeting process provides time and opportunity to find savings in the subsequent three years.

 

“We can shift the work towards bringing the [tax] rates down each and every year,” he committed. “I will remind Londoners in both of the previous multi-year budgets, the [tax increases] in those [additional] years came down each and every time.”

 

Tax Rate Increases

• 2024 8.7 per cent ($286)
• 2025 8.8 per cent
• 2026 5.8 per cent
• 2027 6.8 per cent

 

The Average Annual Increase is 7.5 per cent.