Councillors talk of city job and service cuts
‘Toughest budget’ prompts dire thinking
Councillors fearful of prospective tax hikes are calling for a rare budget debate about cutting services or even downsizing the city workforce.
Hamilton faces a default budget increase every year due to inflation and contractual wage improvements. Council has still whittled the annual tax hike to an average of 1.7 per cent over the past six years, largely without cutting services.
But some councillors say they’re starting in a deeper budget hole ahead of 2017 that equates to a six-per-cent tax hike, or almost $200 extra on the average bill.
That doesn’t include an expected water rate hike in the $30 range or $1 million in requested city service im-
provements — like new median flower beds and more investigations into rogue sewer hookups — that aren’t included in the preliminary budget.
Council will inevitably trim that daunting preliminary figure. But Coun. Chad Collins said the city would have to find $32 million in savings to reach the council target of 1.8 per cent. Even then, he argued the impact of spiking property assessments will inflate the tax impact for many homeowners.
“This is going to be one of the toughest budgets we’ve faced in years. If you want to find those savings, there will be an impact on our labour force,” said Collins, who is bringing forward a motion asking for options to raise more revenue and cut labour costs with “minimal adverse service level impact.” He suggested in an interview the city can look at encouraging early retirements, phasing out vacant positions or merging jobs.
“It’s not a matter of tinkering anymore,” added Coun. Terry Whitehead, who said based on his discussions with city finance staff, he believes the city faces “several years” of budget challenges that didn’t exist over the past five years.
For example, the city needs to match tens of millions in expected federal infrastructure grants promised over the next three years. Skyrocketing property assessments, meanwhile, will likely force Hamilton homeowners to pay more education taxes. In past years, residents benefited from lower-thanaverage education tax bills.
Collins said he isn’t advocating for layoffs, but noted Brampton recently unloaded 25 managers while Ottawa has lain off more than 150 managers and unionized workers.
The city has not experienced major workforce shrinkage since amalgamation, although the 2013 privatization of HECFI resulted in well-publicized cuts. The city, police services and agencies like the library employ more than 7,400 people altogether.
City finance staff was not willing to talk about the latest budget numbers or tax implications ahead of a formal council update expected Friday.
Mayor Fred Eisenberger, however, argued the city won’t require a “hack-and-slash approach” to reach a “reasonable” final budget — although he won’t yet say what that figure could look like.
“We’ve been one of the lowest (tax) increases in the province for the past six years. At some point, you need to play catch-up.”
Residents were taxed for $828 million last year, with a 1.8-per cent average tax hike that added $67 to the so-called average owner of a home worth $295,300.
Over five years, the successive sub-two-per-cent increases have still added $317 to that average tax bill, plus another $124 for extra water rates. Those hikes are among the lowest in Ontario cities.