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'No appetite' for proposed 6.2% tax levy hike: Boshcoff

Mayor Ken Boshcoff says he’ll look to “hold the line” on the 2023 tax levy increase at two per cent, while others city councillors say they’re more focused on avoiding service cuts.

THUNDER BAY — Mayor Ken Boshcoff says he can’t accept the tax levy hike proposed by city administration, suggesting council “hold the line” at two per cent.

City staff released the draft 2023 budget on Wednesday, including a 6.18 per cent increase to the tax levy before growth, but avoiding significant reductions in service levels. The proposed increase to the taxy levy amounts to $12.8 million.

Boshcoff, who received the budget in mid-December along with the rest of council, said he’s most concerned about what he called an unaffordable increase for residents.

“I believe two per cent would be the maximum I could live with, so I myself now have a lot of work to do in terms of proposing [how we could get there],” he said. “But every member of council who got elected also was campaigning on a restraint, ‘hold the line’ policy — or practically everyone.”

Boshcoff said he’d push for a tax freeze in a normal year, if not for COVID-19 recovery and high inflation.

City manager Norm Gale, however, suggested there’s no way to bring the tax hike down to usual levels without significant service cuts.

“There’s no tinkering in this budget that’s going to realize a budget increase of two per cent and maintain service levels and infrastructure spending at the same time,” he said at a Wednesday press conference. “It’s just not going to happen.”

Three city councillors who spoke with TBnewswatch expressed a desire to trim the increase, but said they expect it to remain well above average, while a fourth expressed uncertainty.

Coun. Mark Bentz, who returns as the chair of the city's budget meetings, said while the proposed hike “is probably a little on the high side,” it’s not far beyond what could be expected in a year of high inflation.

“My approach has always been inflationary increases to the budget,” he said. “I don’t see this being a two per cent year like in the past — it’s going to be higher than that, obviously, just dealing with the inflationary pressures.”

Like other councillors, he has reservations about administration’s proposal to cut capital spending by 10 per cent to contain expenses, saying it would deepen the city’s already massive infrastructure gap.

“I think we can maybe increase our capital spend and decrease the operating budget to achieve a budget that’s maybe a bit lower and puts more money into the capital side,” he said.

Coun. Brian Hamilton agreed, but isn’t optimistic council can make much of a dent in the levy increase without unacceptable compromises.

“I imagine there’s going to be probably very little wiggle room, unless the community wants to consider having … service reductions — and indeed, those are very, very difficult to initiate,” he said.

Coun. Kasey Etreni, heading into her first budget process, said maintaining service levels will be top of mind over the course of eight scheduled budget meetings. However, she’s also looking for ways to cut operating expenses.

“It’s going to be a tough budget. We’re going to have to sharpen the pencils,” she said. “I appreciate the people whose budgets right now are tight, so to have an increase in property taxes would be pretty tough at this time.”

Coun. Rajni Agarwal said she’d like to see council take another look at cost-saving suggestions in a program and service review delivered by Grant Thornton in 2020, few of which have been implemented.

“We definitely have to see it lower,” she said of the levy hike. “How much lower can it come down, I don’t know.”

Boshcoff expressed hope he’ll find others on council who are similarly committed to lowering the tax hike.

“There is no doubt that if 13 people campaigned on holding the line, certainly we can find seven people who will hold the line and keep the taxes down,” he said.

In terms of where the city could cut, councillors offered few concrete ideas, but said they expect the budget process to include serious discussions over operating cuts.

Boshcoff insisted a number of small reductions could be impactful.

“When you’re dealing with a volume book of that nature, really you try to chip away at the edges as best you can in the hopes that a whole bunch of chipping will knock a few percentage points down,” he said.

A number of councillors questioned the budget’s proposed increase of 50.9 full-time equivalent employees (FTEs), amounting to a 2.4 per cent staffing expansion.

“My first impression is that there’s a lot of new hires in this budget, which of course I’ve been trying to minimize over the years,” Bentz said. “We’ve got to take a close look at what they’re proposing and why.”

Of the new FTEs, 20.8 are requested by police, driving the force’s proposed 7.8 per cent, or $4.4 million, budget increase.

Council “certainly could consider” saying no to that request, said Bentz, though the decision could be appealed to the Ontario Civilian Police Commission (OCPC).

“We do know there are pressures on the police,” he said. “That’s also where we need feedback from the community. If the community says they have no issue with 21 new staff at the police station, then that certainly has to be taken into account.”

Hamilton said the requested expansion is large but must be seriously considered.

“Even though we’re talking about the challenges from a financial perspective for community members, we really also want to build a safe community … given that we have a crime situation, an addictions crisis that are at our doorstep.”

Other proposed FTE expansions include 14.2 rural care paramedics, 10.6 new long-term care positions, some of which are provincially-mandated and funded, 2.4 requested by the Community Economic Development Commission, 3.3 in the city manager’s office, including a solicitor and HR recruitment officer, two IT staff, coordinators for new green bin and recycling programs, a planning supervisor, and an anti-racism and respect intern.

Boshcoff called the increase unsustainable.

“The largest factor that really propels [tax increases] is hiring dozens more people,” he said. “A lot of these that are legislated are going to make it very difficult. So the job of council is really going to be a belt-tightening exercise.”

The longer-term answer is to drive more revenue for the city, Boshcoff said, arguing the city’s biggest medium-term opportunity is to capitalize on a hoped-for regional “mining boom” by attracting head offices and workers to the city.

However, he said even a successful strategy to do so will take time to deliver benefits.

Ian Kaufman

About the Author: Ian Kaufman

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