Council defuses 'foolhardy' budget bomb— no tax break from $31 million budget surplus
It seems council is still feeling the heat from approving an 8.7 per cent tax increase earlier this year.
On Tuesday, city council considered a motion to redirect some of its $31 million surplus from the 2023 budget towards a future tax break.
“Let’s look at bringing down the tax burden in 2025 - where possible,” suggested Coun. Corrine Rahman.
Rahman’s motion would split the amount of surplus dollars directed into council’s Community Investment Reserve Fund in half, leaving $3.5 million to instead be set aside along with a request to Mayor Josh Morgan to direct that money towards reducing the tax burden when he prepares his 2025 municipal budget.
The money would shave about 0.4 per cent from next year’s property tax increase.
Coun. Paul Van Meerbergen called the proposal foolhardy in a scathing rebuke, “Why it’s foolhardy is because you are setting all taxpayers up for what I’ve described before as a budget bomb.”
Van Meerbergen said one-time dollars shouldn’t be used to fund an ongoing tax reduction year after year.
He warned, “If the following year, a surplus of that magnitude doesn’t materialize, then it turns around and bites you in the derriere because there is nothing there to [financially] support it, and hence a budget bomb.”
The surplus includes $28 million from the property tax supported budget and $3 million from the water budget.
The massive surplus from last year’s budget was largely the result of three temporary external factors.
Higher interest rates resulted in better returns on the city’s financial investments, delays in MPAC property value reassessments, and a deal launching the green bin program until January 2024.
The existing policy for the tax-supported budget recommends:
- 50 per cent to reduce future debt issuance ($14 million)
- 25 per cent to council’s Community Investment Reserve Fund ($7 million)
- 25 per cent to the Capital Infrastructure Gap Reserve Fund ($7 million)
The surplus policy for the water budget would divide the $3 million evenly between debt reduction and a reserve fund.
Council defeated the motion to redirect some of the surplus towards a future tax break—although the mayor left the door open to using some of the Community Investment Reserve Fund to reducing future debt issuance in the future.
“If you want to give Londoners some permanent tax relief, put it towards debt reduction,” Mayor Josh Morgan told colleagues. “If you don’t want as much in the Community Investment Reserve Fund, put the $3.5 million towards more debt reduction. We’ll avoid issuing more debt; we’ll avoid interest payments on those debts.”
CTVNews.ca Top Stories
Video shows suspect setting Toronto-area barbershop on fire
Video of a suspect lighting a Richmond Hill barbershop on fire earlier this week has been released by police.
'I have the will to live': N.B. woman needs double lung transplant
A New Brunswick woman suffering from sarcoidosis, a disease that limits your lung capacity, is in need of a double lung transplant.
The kids from 'Mrs. Doubtfire are all SUPER grown up now, and we're not OK
The adorable trio of child actors from the 1993 classic comedy 'Mrs. Doubtfire,' which starred the late and great Robin Williams, are all grown up and looking back on their seminal time together.
Police officer hit by driver of fleeing vehicle in Toronto
York Regional Police say they are continuing to search for a suspect in an auto theft investigation who was captured on video running over a police officer in Toronto last month.
TD worst-case scenario more likely after drug money laundering allegations: analyst
TD Bank Group could be hit with more severe penalties than previously expected, says a banking analyst after a report that the investigation it faces in the U.S. is tied to laundering illicit fentanyl profits.
A Chinese driver is praised for helping reduce casualties in a highway collapse that killed 48
A Chinese truck driver was praised in local media Saturday for parking his vehicle across a highway and preventing more cars from tumbling down a slope after a section of the road in the country's mountainous south collapsed and killed at least 48 people.
Britney Spears 'home and safe' after paramedics responded to an incident at the Chateau Marmont, source tells CNN
A source close to singer Britney Spears tells CNN that the pop star is 'home and safe' after she had a 'major fight' with her boyfriend on Wednesday night at the Chateau Marmont in West Hollywood.
Suter scores late goal, clinches series for Canucks
Pius Suter scored with 1:39 left and the Vancouver Canucks advanced to the second round of the NHL playoffs with a 1-0 victory over the Nashville Predators on Friday night in Game 6.
Premier Legault reiterates that McGill pro-Palestinian camp must be dismantled
Quebec Premier François Legault reiterated that the pro-Palestinian encampment at McGill University must be dismantled while police remain 'on the lookout for new developments.'