Region budget a ‘responsible financial plan’
Property tax increase on the Region’s portion of the bill is 1.8 per cent
Niagara Region councillors have approved the municipality’s budget for 2021 that contains an overall property tax increase of 1.8 per cent.
For the average property assessed at $278,764, a property tax bill’s regional portion will increase by $29, totalling $1,640 this year.
“Council approved a budget that maintains valued programs and services for our community but also ensures that we come out of this pandemic stronger,” said budget committee chair Gary Zalepa, a Niagara-on-the-lake councillor.
Region Chair Jim Bradley said council understood residents and businesses are facing financial challenges as a result of the COVID-19 pandemic.
“The 2021 budget reflects our efforts to ensure Niagara is responsive to this crisis while continuing to deliver the supports and services our residents rely on,” he said.
The most contentious part of the budget was using the Region’s reserves to lessen the tax burden. Council voted to draw $4.3 million from reserves, which cut the tax increase from 2.9 per cent to 1.8 per cent.
Council’s main reserve is the Taxpayer Relief Fund, which is on the ledger for emergencies or unforeseen costs. After last week’s budget exercise, the reserve fund will have fallen to about $15.2 million.
Best accounting practices for
an organization the Region’s size tell council the reserve is seriously underfunded — and should be maintained in the $60-million range. Eight years ago, the reserve fund was $30 million.
“I hear a lot of talk about safeguarding taxpayer dollars, but I do not see a lot of action on that,” Pelham Coun. Diana Huson said. “There is no benefit in bottoming out our savings. You can’t do that and prepare for the future. We have a lot of things to deal with in the next two years.”
Huson suggested cutting some discretionary programs to the reduce the burden on taxpayers without raiding reserves, but her amendments were voted down.
“Almost 84 per cent of our services are essential — EMS (emergency medical services), policing, public health, longterm care,” Huson said. “We are going to need more resources over the next two years.
“We have to be very careful about how we spend our money. I’m going to vote against this. We need to preserve the integrity of our financial health. It has been eroded significantly over the years. I can’t go along with it, sorry.”
St. Catharines Mayor Walter Sendzik succeeded with his motion to draw from reserves to ease taxpayers’ burden during a once-in-a-century pandemic.
“I’m speaking for the average person in the community who is struggling. I understand the need to prepare for the future and unexpected costs, but that taxpayer relief reserve is there for a reason,” Sendzik said.
“When you look at 2020, and what property owners in our community are going to be facing — it’s lost employment and income, it’s reduced employment and income, it’s an uncertain future.
“I think the economy will come back this year, and we will gain a lot of momentum to get through this. I think Niagara will be in a good position over the next decade-plus. That means the assessment growth will allow future councils to replenish the reserves ... so we have that certainty of financial stability.
“But today, I think we owe it to ratepayers of Niagara to push ourselves on something like this, to say we are going to draw on this reserve because it is designed to provide relief to the taxpayer.”
The pandemic will cost the Region an estimated $17.8 million in expenses. However, the Region will be able to balance the extra costs using leftovers from special provincial funding initiatives and the continuing effort to rationalize internal resources.
Council also voted to support a new west Niagara hospital with a $1.5-million annual contribution to a special reserve fund. In total, councillors made a $12.6-million commitment toward the facility, which will replace a Grimsby hospital that is almost 75 years old.
The operating budget for 2021 contains a tax levy of $405.3 million, which funds the daily business of the Region and its boards and agencies, including police, regional housing and the conservation authority. The police budget, which will be up four per cent this year because of a new labour contract, was listed as one of the major pressures.