Bitterness from botched budget will linger
Valérie Plante’s first budget is a done deal, but the political fallout may be far from over.
With a majority on council, Plante’s Projet Montréal administration adopted the $5.4-billion budget Wednesday at city hall 40 votes to 24. And with the balance of power on the agglomeration council stacked in Montreal’s favour, that body representing all the municipalities on the island also gave its rubber stamp Thursday, despite frustration expressed by 15 suburban mayor members.
The votes to pass the budget were never in doubt. But the backlash to it has nevertheless been so bitter that it has dispelled much of the goodwill and positive vibes surrounding Plante’s upset mayoral victory in November.
Homeowners are upset over a 3.3 per cent hike in their property, borough and water taxes and business owners are furious about a three per cent jump in their combined taxes — both over the inflation rate Plante vowed to peg any increases to. And mayors from neighbouring municipalities are up in arms over a 5.3 per cent rise in their contribution to the city for shared services — a bump they claim they were never forewarned about.
The additional 1.1 per cent increase in the water tax that must be factored in came out of left field. Plante is trying to sell it as a necessary investment in crumbling infrastructure that will save money for future generations after years of neglect. But significant work is already taking place on addressing this backlog.
The city spent more than $300 million last year on water main replacements, a not-insignificant amount. Plante wants to up that amount to $500 million. Why did ramping up this work become so urgent since her arrival in office? Why didn’t she campaign on the need to ask Montrealers for more if it is so essential?
As Prime Minister Justin Trudeau improbably proved, it is possible to sell voters on potentially expensive financial moves like running a deficit — if you put it out there beforehand and provide some convincing evidence. That has only happened belatedly here.
The messaging surrounding this budget has been a hot mess, from the surprise water tax hike to the disingenuous insistence that only the property tax portion of the bill counts when it comes to a promise kept.
There hasn’t been a revolt like this since former mayor Gérald Tremblay had to back down from a five per cent increase of his own in 2005.
Plante has squandered a lot of political capital — and for what? Despite a hefty 5.2 per cent spending increase over the previous year, this first Projet Montréal budget barely scratches the surface of her ambitious agenda. There’s $1 million for more housing inspectors to crack down on slum landlords, $2.5 million more for the Conseil des arts de Montréal and $6 million more for snow-clearing. The campaign priority that got the most additional money is a $27-million boost for public transit.
Other big-ticket items accounting for the spending increase are a $25-million jump in the nearly billion-dollar public security budget due to contract commitments with police and firefighters agreed to by the previous administration.
That, along with the $358-million shortfall left behind by her predecessor, would have entitled Plante to table a cautious first budget, perhaps delay a few signature promises and maybe get a few unpleasant spending cuts out of the way early. She’d already scored some wins by securing a $300-million investment from Quebec in a new fleet of buses, overturning the pit bull ban and cancelling the ePrix.
Prudence would have been admirable, or at least understandable, after years of property tax increases coupled with rising property values have left taxpayers tapped out. As one researcher from the Institut de research and d’informations socioeconomiques noted this week, property values in Montreal climbed 30 per cent between 2008 and 2017, outpacing increases in average income, which only rose two per cent. That’s a heck of a mismatch already, that affects the ability of families, renters, seniors, and small business owners to afford to live and work in this city.
Montrealers provide 68 per cent of city revenues through their property taxes for a budget where 42 per cent of the pie goes to salaries and benefits and nearly 17 per cent for debt servicing charged. It doesn’t leave much wiggle room to fund “other expenditures” — all those programs and services Montrealers depend on.
Where is Plante going to get the money for some of her major new policy ideas, like a rebate on the tax on real estate transactions for families buying homes in the city? And how much compensation is she going to be able to afford to throw to businesses suffering due to nearby road construction? Going back to taxpayers for even more cash is going to be that much more politically difficult in the future.
With this unpopular budget, Plante has shown that she’s not so different after all from previous mayors who were highhanded in their dealings with the suburbs, insensitive to taxpayers’ ability to cough up more and unashamed of resorting to doublespeak.
And she may have complicated her ability to enact her own agenda.