Hamilton councillors wrestling to keep 2022 tax increase below 3 per cent
March 9, 2022
Hamilton’s 2022 average tax increase is currently in flux. Depending upon various service enhancements that councillors could approve, the increase may edge past three per cent.
After almost two months of deliberations, councillors are staring at an average 2.8-per-cent tax increase for 2022, but there still remain several items that could push that figure higher. A 2.8-per-cent average tax increase would mean a house assessed at $381,000 would have an extra $123 on its tax bill.
Councillors still have to decide whether to spend just over $1 million on a new ambulance and 10 additional employees -- the city and province will split the cost 50 per cent -- and about $950,000 to implement a living wage for all Hamilton union and non-union staff and students, including those employees working at the public library.
Councillors are almost assured of taking about $1.4 million from reserves to cover the area-rated costs for fire for 2022. The move will provide a year for staff to establish an area-rating formula that encompasses career, composite, and voluntary fire service workers.
By tapping into reserves, it will reduce the average tax increase to 2.65 per cent.
“I like the fact we are going lower,” said Mountain Coun. Tom Jackson.
Councillors approved a 2.1 per cent tax increase in 2021, while in 2020 at the start of the COVID-19 pandemic, the average tax increase was 2.9 per cent.
Councillors, though, delayed moving forward on those decisions when they requested staff investigate the financial impact in 2022 and beyond if they agree to phase-out services that are area-rated. Staff recommended eliminating area-rated services for sidewalk snow clearing in Ancaster, street lighting, park purchases and recreation over a four-year period. Several councillors, including Stoney Creek's Brad Clark, insisted on a 10-year phase-out plan. Downtown councillors wanted a four-year phase-out to assist their residents, some of whom earn the least in the city but pay the highest taxes. Clark suggested including transit service as part of the 10-year area-rating phase-out.
Flamborough Coun. Judi Partridge said suburban and rural residents will be hit with higher reassessments on their properties that are projected to begin in 2023 after the province delayed the process after the last assessment was completed in 2016 because of the pandemic.
Transit advocates have long wanted area rating on transit to be eliminated because they believe service could then be expanded to all parts of the city and paid for by every homeowner.
“People will be severely impacted,” said Partridge. “We are not going to get transit into the rural area. The city won’t be able to afford it. The taxes would be through the roof. We have to do everything we can to minimize the tax on our residents.”
Clark said removing area-rated services will have a “significant” impact on residents. He said even though the average tax rate will be, for example, about 2.8 per cent, it is based on a home assessed at $381,000.
“I haven’t come across a house (worth $381,000) in my ward,” he said. “When you actually calculate it out, for many of the residents it will be a much larger tax impact because of that tax shift.”