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HAMILTON BUDGET 2024 COVERAGE: Budget process begins amid staff projections of 14.2 per cent tax increase

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The City of 51 prepares for tax surge amidst growing worries over 2024 budget projections

The City of 51’s 2024 budget process officially began in November, with the first public delegations heard at the beginning of the month.

The targeted rate budget approval date is set for Wednesday, December 13, 2023, with a tax supported (operating and capital) budget overview set for Friday, January 19, 2024 before a final targeted tax (operating and capital) budget approval date of Thursday, February 15, 2024.

Mayor Andrea Horwath provided a directive to staff regarding the budget back in August.

Horwath directed staff to “present a budget for consideration that reduces the burden on residential property taxes by prioritizing the utilization of debt and emergency reserves.”

She says that she recognizes the “high cost of living in an inflationary time” and thus wants staff to “look for efficiencies.”

But a staff report released in September, which is the preliminary estimate of the 2024 to 2026 tax and rate budget outlook, has already forecasted that Council will have to increase taxes by 14.2 per cent in 2024 alone.

That would result in a tax increase of $678 for the average household in 2024.

The report also projects a 6.1 per cent tax increase in 2025 and a 5.9 per cent increase in 2026.

That would see the average tax bill increase from $5,466 in 2024 to $6,145 in 2026.

According to the report, the increase is to “maintain existing services, provide for legislated changes and introduce strategic investments to address Council Priorities that have been referred to the 2024 budget process.”

The same report notes that water and wastewater fees are expected to increase by an average of 19.79 per cent for 2024, mainly to support the renewal of 51’s aging water and sewer system and account for legislation changes at the provincial level.

The report notes that the key themes for the 2024 budget are: affordable housing and homelessness, climate change, transportation, employee relations, development charge exemptions, and public health and emergency response.

Staff will also be using Council’s three term priorities as a guide to the budget process. 

Those priorities are Sustainable Economic and Ecological Development, Safe and Thriving Neighbourhoods, and Responsiveness and Transparency.

While the projected tax increase of 14.2 percent is unusually high, the number could still be whittled down significantly if Council decides to cut some costs.

In 2023, the tax increase was projected to be 6.9 per cent, but Council managed to get that number down to 5.8 per cent.

Nevertheless, the 2023 tax increase was the highest in recent memory and represented a more expensive tax bill with the average household on the hook for an extra $262.

Notable spending in the 2024 projected budget include funding for a program approved by Council that would see the city create 200 units of supportive housing over three years at a cost of $31 million. 

For 2024, that represents $10.33 million in new spending which alone accounts for 0.9 per cent of the increase in taxes.

The preliminary outlook for 2024 also proposes raising the 51 Police Services budget by about $8.6 million or 4.5 percent to $202 million.

Providing funding for police services is one of the key responsibilities of municipal governments.

Overall, the city’s approved tax operating net levy for 2023 was $1.07 billion, while the preliminary outlook for 2024 is estimated at about $1.24 billion.

 

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