Brace yourself Richmond Hill residents: higher taxes may be on way

Public budget session set for this Saturday

Yorkregion.com
Jan. 20, 2016
By Kim Zarzour

Is this the year Richmond Hill taxpayers pay the piper?

Homeowners may face a special levy that could bump the town portion of their 2016 taxes up 6.88 per cent - making it one of the highest municipal increases proposed in the GTA.

Town staff unveiled a draft operating budget Tuesday, calling for a 3.96 per cent increase in municipal taxes to maintain services, plus a special levy that would mean a $5,476 tax bill on a home assessed at $638,000. This would represent an increase of $174.63 over last year.

The tax rate is usually lower by the time the final budget is passed and at this week’s budget discussions, councillors voiced a desire to get the numbers down.

However, if the draft numbers are approved by council in coming weeks, the overall total rate increase (which includes the Region of York and school board taxes) would be 3.29 per cent.

Councillors are calling it a “wake-up budget”.

For years, the town has dipped into its Tax Rate Stabilization Reserve to make up for reduced assessment growth.

It was a practice that started during the economic downturn in 2008 and was meant to be temporary until growth returned to 3 per cent, but that hasn’t happened, said David Dexter, acting commissioner of corporate and financial services and treasurer.

The stabilization reserve was never meant for long-term use, but for emergencies such as the recent ice storm, Dexter said.

At the same time, capital assets and infrastructure totaling more than $4 billion require ongoing repair and replacement. The town spends on average about $20 million a year, but contributions to the capital reserve funds have not kept pace.

Based on the recent 10-year capital forecast, those funds could be depleted as early as 2021, Dexter said.

Several other municipalities have passed special levies to address similar infrastructure sustainability concerns.

Shoring up those reserves with a levy will help build financial capacity for the future, he said. It will also address some non-sustainable revenues, but councillors worry it will be a tough sell.

“How do I go back to my residents and tell them?” asked Ward 3 Councillor Castro Liu, pointing to other municipalities with lower rates, such as Markham with a 2.44 per cent increase.

Asked why other York municipalities have lower tax rate increases, Dexter said Markham, Vaughan and other municipalities have greater assessment growth, which translates into more tax revenue.

Ward 2 Councillor Tom Muench said he warned last year there were troubles ahead. “Now that we’re being more truthful ... we’re realizing the real costs.”

“I know I as a resident think 6.88 is very difficult to swallow,” said Ward 6 Councillor Godwin Chan.

The coming five weeks of budget deliberations may help determine whether the levy should come all at once this year or more gradually, to “ease the pain”, he said.

“It’s a matter of how much bitterness we want to swallow at one time,” added Regional Councillor Vito Spatafora.

“We’ve come to a reality that we are up against a wall here as other municipalities have been in the past,” said Mayor Dave Barrow.

Some municipalities, such as Markham, have gone into debt, he added.

“This is going to take a lot of comments shared, ideas shared - constructive ideas - and I look forward to the next five to six weeks of discussion.”

The budget committee will continue to meet with town departments throughout February and council is also consulting with the public online and in public forums.

A public budget information session is planned for this Saturday at Hillcrest Mall from 10 a.m. to 2 p.m.