59 Carden St.

A federal budget unlike any other

Posted by Magda
Budgeting at all levels has the potential to impact cities. This time, though, it seems like the federal budget might be more important to cities than ever before.

That's because, with stimulating the economy an ever bigger target on the federal government's horizon, there's talk of injecting money into infrastructure and extending employment insurance benefits.

The first would have a clear impact on the city, potentially giving Guelph a chance to cross off some of those ever lingering projects that perpetually fall off the list when budgets are written.

The impact of the second is less immediately clear, but likely tremendous nonetheless. With Wellington County's projections of the number of social service cases constantly on the rise, and with the county and city not seeing eye to eye on how social services should be funded, an extension of employment insurance benefits could mean a smaller social services drain on both municipalities.

The lefty think-tank Canadian Centre for Policy Alternatives is recommending infrastructure and employment figure prominently in the budget.

Now, we need to wait til Jim Flaherty presents his budget Jan. 27, and until the opposition parties decide whether or not it's acceptable, to figure out whether anything is coming our way.

• Social services budget grows, Jan. 13
• A crystal ball?, Dec. 3, 2008
• An economic stimulus plan for Canada’s economy and its people, Canadian Centre for Policy Alternatives, Jan. 13

Two years of background

Posted by Magda
On new year's eve-day, finding anyone from the province or the Association of Municipalities of Ontario to comment on the city-county tiff over the provincial funding is surprisingly difficult. So far the only person I've gotten on the phone is the media liaison at AMO, who picked up even though he's not officially working today.

He's directed me to a mountain of information regarding the provincial social service upload, available here -- background on the two-year's worth of negotiations. What I'm trying to find out is what was said in the negotiations about a specific provision that would have ensured money went to municipalities it was destined for -- which might have prevented the Guelph-Wellington disagreement. MPP Liz Sandals said the province wanted such a provision, but AMO wouldn't agree to it, and I'm trying to figure out why. I'm not sure I'll find that out today, but hopefully we'll get answers eventually.

Making the news

Posted by Magda
As reporters, we generally try to stay away from making the news. But yesterday, Councillor Bob Bell put me in the middle of it.

We were talking about what might happen with the city's tax rate in light of the cut in provincial funding and an increased ask for social services funding.

If no more money resurfaces, Bell would like to reopen the budget and remove some of the new services to keep the tax rate low. But what actually happens depends on the newspapers, he said.

Huh?

"If people understood the budget discussions were using funny numbers and at the last minute they're slipped an extra 1.5% (tax increase), I think people would be pretty annoyed," he said, adding that people's knowledge of the issue depends on how much coverage it gets in the papers. (When he refers to "funny numbers," by the way, he is talking about the fact council passed the budget without including the provincial funding cut and request for extra cash from social services.)

Looking into it

Posted by Magda
On budget night, we heard that the province had given the city notice that day that they were cutting $1.45 million in funding the city had grown accustomed to. The Tribune, though, has reported that the city knew in November that the funding would be cut.

Heftier tax hike in offing, Dec. 19, Guelph Tribune

In November, Sandals said, Guelph was notified that it would not be getting OMPF funding, because the benefit it would get from uploading in 2009 would exceed $1.45 million. On Monday, the province again contacted city hall to update the data, she said. The new data showed Guelph- Wellington benefitting to the tune of $2.69 million in 2009 from uploading of the Ontario Disability Support Payments program and the Ontario Drug Benefits program. The province attributed $2 million of this benefit to Guelph, which pays most of the costs of Guelph-Wellington social services.

I'm looking today into who knew what and when. Stay tuned.

It's the economy, stupid

Posted by Magda
Even though it wasn't on the table for a decision, after parking the economy was the most popular topic of discussion on budget night.

• Jane Cabral, Neighbourhood Support Coalition: Funding for neighbourhood groups is more important during uncertain economic times, because they do things like helping people buy their kids school supplies and offering breakfast programs.
• Maggie Laidlaw: An arts and culture supervisor will help create jobs in that sector, which are more stable these days than manufacturing jobs.
• Gloria Kovach: Given that people are struggling to pay their taxes, it's not the time to spend money on an arts supervisor.
• Maggie Laidlaw: New sidewalks are important, because more people walk during a recession.
• Bob Bell: The recession of the early 1990s increased the number of people on welfare by 50% in three consecutive years -- so it's not an appropriate time to cut the social services transfer to the county.

4%, or is that 5.5%

Posted by Magda
The draft budget for 2009 includes a tax increase of 4% -- not the 6.5% guideline set by council. I'm heading to the first budget meeting of the year in about five minutes. Read more this afternoon.

Update: Make that 4% for business as usual, 5.5% including new services. Sorry if I've caused any confusion.

How they're spending your cash

Posted by Magda
The city's put out an interesting summary, in advance of next week's budget meetings, of how they spend your money. The average household paid $2,602 in taxes last year, or 216.84 a month including $42 a month for policing, $12 a month for public transit and $9 a month for libraries.

The study they refer to, incidentally, is found here. The city press release says the study finds Guelph's  taxes are lower than average in municipalities with populations over 100,000. I haven't found that particular chart, but many of the other comparisons -- taxes per capita, taxes per $100,000 assessment -- indicate our taxes are above average.

In any case, all this will come up for discussion starting this week in budget meetings.

(Graph from the City of Guelph.)

Update: The chart that shows Guelph's taxes as lower than the average is here (it's page 225 of the study I refer to above). It indicates that Guelphers who own a single-detached bungalow pay less property tax, on average, than owners of single-detached bungalows across the province. Separate of home type, however, the average resident still pays more in Guelph than across the province -- $1,164 compared to $1,121.

Budget deliberations coming

Posted by Magda
It can't possibly be a good time to start talking budget. With world economic markets in meltdown and the Bank of Canada warning yesterday of a long period of economic stagnation, the city is starting budget deliberations next week.

The issue of next year's tax increase has already been a heated one. Last year council set up a procedure that involves starting with a guideline tax increase representing the cost of business as usual, plus a 1% increase in services. This spring, staff said that figure comes to 6.5% -- higher than in past years because of an already troubled economy. Councillors were very careful at the time to make it clear they didn't support that kind of increase, and Gloria Kovach brought a motion to council -- which failed -- seeking to make that explicit.

The police board already brought forward a budget that's 6.7% higher than last year's.

In light of all that, it'll be interesting to see how budget talks go, and whether the first step might involve readjusting that 6.5% for the current economic situation.

The meetings are in council chambers.

• Finance, administration and corporate services committee, Wednesday, noon
• Emergency services, community services and operations, Wednesday, 5pm
• Governance and economic development, Thursday, 5:15 pm
• Community development and environmental services, Friday, 9:30 am

Make that 6.7%

Posted by Magda

The police services board passed their budget today. It's up 6.7% from last year -- even though councillors have made it clear they're unhappy with a proposed 2009 tax increase of 6.5%. The police budget now goes to a city committee, then to council in November.

If other departments also budget for a 6.5% -- or larger-- increase, council will be stuck deciding whether to rewrite those budgets in its budget deliberation meetings, or go back on a pledge that next year's tax increase will be less than 6.5%. It'll be interesting to see which course they choose.

Read more about the police budget in the Merc tomorrow.

Talking city budgeting, from a business perspective

Posted by Magda

The city and the chamber are holding a discussion on capital development and financial planning. On the agenda is the city's strategy for employment lands and a business-oriented overview of the city's budget plans.

The meeting is next Tuesday at the Italian Canadian Club, 10 am til noon.

To register, call the chamber at (519) 822-8081 or email Irene@guelphchamber.com.