‘FISCAL FLEXIBILITY’
Watson hints at easing grip on purse
Jim Watson pledged Sunday to keep property tax increases between two and three per cent annually during the next municipal term if he is re-elected mayor.
Guided by his trademark fiscal prudence but prodded by repeated complaints about the state of the city’s roads, Watson said an increase in the two- to three-percent range would generate an extra $10.3 million in 2019 revenues, compared with 2018.
With allowances for other unforeseen expenses, that should leave about $8.3 million to invest in “infrastructure renewal,” mainly roads, sidewalks and bridges, he said, bringing annual spending on this item to $137 million. At this rate, Watson said, the city’s longterm, $60-million infrastructure funding shortfall could be eliminated within seven years.
Watson has kept annual tax increases at or below 2.5 per cent during each of his eight years in office and below two per cent each year in the current term. An increase from two to three per cent would add $36 to the average tax bill, the mayor said.
He said adding some fiscal “breathing room” makes sense this year because of additional costs anticipated with regulating legalized cannabis sales and the unpredictability of funding flows in the Ontario Progressive Conservative government’s first budget next year.
“Until the new provincial government introduces its first budget, there is uncertainty as to how their fiscal decisions will affect the municipal budgets across Ontario,” he told reporters.
“Simply put, we need the fiscal flexibility to be able to react and adapt the city’s budget in response to these factors.”
While Watson and other incumbents have been steadily criticized over the state of the city’s roads, the mayor blames a couple of bad winters for making things worse.
He said there were 90 “freezethaw” cycles in the past two years, contributing to a widespread problem with potholes and crumbling asphalt.
“This is a recognition that we need to speed up that renewal because we’ve had a couple of really bad winters and the condition of the roads is something that people talk to me about all the time.”
A city report in 2017 on the condition of Ottawa’s roads revealed 75 per cent are in less-than-good repair and 30 per cent are so bad they “may negatively impact the level of service.”
Watson said the city is budgeting an extra $8 million to deal with regulatory issues around the legalized use of cannabis, including hiring more bylaw officers to deal with issues in spaces like restaurants, lobbies and city parks.
“Who are you going to call when someone is smoking up in a park?”
Some of the $8 million might be recoverable from a two-year provincial fund of $40 million intended to help municipalities deal with the regulatory expense of legal pot. Watson said there is no point in even attempting to “opt out” of pot sales, as cities can do, and lamented that councillors will not have more control over where pot shops can open.
(This is being left to the Alcohol and Gaming Commission of Ontario.)
“I’m not surprised that the mayor is committed to raising taxes, ” said Clive Doucet, Watson’s main challenger in the Oct. 22 vote. “Considering how the city’s debt has doubled under his tenure, it seems inevitable that the next city council will bring in a tax increase.
“Our campaign is committed to reviewing the city finances, and we are not interested in giving an arbitrary number. We will commit to a maximum increase of between two-per-cent and Ottawa’s inflation rate of 3.2 per cent, if necessary after the review has been complete and after the capital and operating priorities have been identified for the coming year.”
Sometimes called the “two-percent mayor,” Watson defended his practice of setting long-term targets, as opposed to dealing with spending bumps as they naturally occur in the course of a mandate.
He pointed to the zero-meanszero campaign of 2006 mayor Larry O’Brien as an example of what not to do. “The reality is we wanted to bring back predictability and some stability to the tax system because it was going 4.9, 4.9, 3.9, then supposedly zero,” he said.
“It was all over the map.”