Property taxes to rise 3.3%
Tremblay defends increase, saying it ‘respects the taxpayers’ capacity to pay’
Property tax hikes will exceed the rate of inflation as city increases spending on roadwork and water infrastructure.
Mayor Gérald Tremblay defended his 2013 budget — which will see average property taxes exceed the rate of inflation — as fiscally responsible amid opposition charges on Tuesday that Montrealers are paying through the nose after years of corruption at city hall.
Property taxes will rise by 3.3 per cent — more than one percentage point over inflation — as the city boosts spending on police and firefighting, while repairing crumbling roads and leaky water mains.
Spending will rise by more than $130 million — or by 2.7 per cent — to a total of $4.9 billion.
Tremblay insisted that the budget “respects the taxpayer’s capacity to pay,” since the average tax bill will go up by $107 to $3,400. To be precise, he said, that works out to an increase of about $8.92 per month.
Reporters, however, kept pressing him on the fact that the tax hike outpaces the inflation rate.
“It’s not true. Stop saying that!” the mayor snapped.
“Since 2002, we haven’t increased overall taxes — including the water tax — more than inflation. It’s true that in the last four years, we did it, we increased more (than inflation). It’s 16 per cent (of increases).
“But look at the other years,” he added.
Tremblay’s 12th annual budget presentation was almost overshadowed by testimony at the Charbonneau Commission on Tuesday, by one of his former Union Montreal staffers, that the mayor was aware of illegal cash donations to his political party in 2004.
Tremblay refused to comment on the allegations, saying the city’s lawyers will have the opportunity to cross-examine the former staffer at the commission.
Louise Harel, leader of the Vision Montreal opposition, accused the mayor not only of fiscal mismanagement, but of turning a blind eye to corruption at city hall.
“The only good news out of this budget is that it’s certainly the last budget of the Tremblay administration,” Harel said.
“The bad news, though, is that Montrealers will have pay through their tax bills the cost of the corruption and collusion in Montreal.”
Tremblay noted that his administration has succeeded in reaching a deal with the city’s blue-collar union to cut back its contribution to the pension fund, passing on the savings to taxpayers.
He said Montrealers are paying higher taxes for “better services in parks, and libraries, infrastructure and housing — an environment where they can live peacefully.
“Security is becoming more and more important, and the citizen, I think, can understand, and he’s willing to pay a little bit more,” he added.
The city will invest $136 million in maintaining and repairing Montreal’s 5,000-kilometre grid of roads and sidewalks. That’s up by $6 million.
The biggest percentage increase in the budget is for water management, which includes fixing the city’s rusting network of underground pipes. Spending in that category will soar by nine per cent to $411 million.
All boroughs will face tax hikes, but some will be hit with much greater increases than others because of variations in their respective tax rates and property evaluations. Plateau-Mont-Royal residents will pay the highest tax increase, at 5.7 per cent, while the hike in Anjou will be the lowest of all boroughs, at 0.5 per cent.
(A homeowner’s property tax bill is calculated by multiplying the municipal property assessment by the borough’s tax rate. For example, a resident of Notre-Dame-de-Grâce living in a house assessed at $347,000 — the average evalu- ation city-wide — will pay a tax bill of $3,327. That’s based on a tax rate of 95.8 cents per $100-property valuation.)
The city’s long-term debt will reach $5.9 billion by the end of this year, up from $5.7 billion in 2011. (When the debt related to the city’s pension-fund deficit is factored in, total indebtedness soars to roughly $7 billion.)
The impact of that indebtedness on the budget is significant, with nearly 16 per cent of spending going toward financing charges and reimbursement of the debt. Interest alone on the debt will amount to more than $327 million, down from $331 million this year.
Véronique Fournier, a Vision Montreal councillor and vice-president of the city’s finance commission, argued that the city’s growing indebtedness is a sign of rampant municipal corruption under Tremblay’s watch.
“We want to know how much corruption and collusion costs in Montreal,” Fournier said. “A number of figures have circulated in the last few days: $50 million, $100 million. When we see that 15.8 per cent of the budget goes toward the debt and finance charges ... it’s ultimately Montrealers who have to pay for that.”
Slightly more than 67 per cent of budget revenues will come from property taxes, while the balance will come from transfers from the provincial and federal governments, fees charged for services and financial contributions from the suburbs.