2023 Budget FAQ
Welcome to the Budget FAQ where you can read answers to frequently asked questions about the 2023 budget
Q: Why did you vote to support the 2023 residential property tax increase of 5.8%?
A: During my campaign, I committed to diligently reviewing budget requests and ensuring that the money we spend is a good investment for the City. We have been reviewing budgets for much of the past 4 months. Throughout this process, I have examined the budget from a needs-based perspective, which, in my opinion, is a departure from historical practices. Council heard loudly and clearly from staff that there has been chronic underfunding in capital infrastructure (water, roads, bridges, buildings, etc.) and a critical need to invest in services for the community. Without investments now, there will be (even more) expensive impacts well into the future. We need to start our course correction now.
Q: Why is this year's tax increase larger than usual?
A: Cost of living increases, including inflation, have led to millions in extra costs to deliver City services and millions more to aid housing and social service providers in absorbing increased costs. We have capital infrastructure that desperately needs investment, and services - like our emergency responders - that are no longer able to meet service standards that the community expects.
Q: It was previously reported in the media that the residential property tax increase was expected to be 5.4%. More recently I read that Council added many items and millions of dollars resulting in a 6.7% increase (subsequently reduced to 5.8%). Is this correct?
A: That is not accurate. The proposed budget increase consists of departmental budgets (5.4%) PLUS items that have been referred to the budget process by Council throughout the year and other staff business cases that were added to the budget process. Since these are new items and not part of existing operations, they must be considered separately. If supported at the time of presentation, the items are referred to the budget process for deliberation. The vast majority of items and dollars were referred to the budget by the previous term of Council based on the merits of the request. It is the responsibility of the current council to deliberate the merit of each item and decide if it will be included in the budget.
An example of an item referred to the budget was the proposed investment of $6.88M in Hamilton Paramedic Services to respond to growing call volume and to enable them to meet their service commitments to the community.
Q: What efforts were taken to reduce the tax increase and save taxpayers' money?
A: The following items were identified through the budget process and were removed reducing the levy by $12.3M, (or roughly 1.2%)
Scaled back plans for City's Canada Day Event
Secured some modest long-term care funding from the Province
A portion of Hamilton Conservation Authority funding will be from an existing reserve fund
Planned reduction in mileage of City vehicles
Reduced salary costs due to vacancies
Municipal savings from the Blue Box Program
Cost of living enhancements for shelters funded by Provincial Homelessness Prevention Program
Increase in revenue from Municipal Agreement with Ontario Lottery and Gaming
Provincial funding received to offset tax revenue losses related to historical changes in the taxation status of Non-Profit Long-Term Care Facilities
A decision to delay the salary component of the Employee Recruitment and Retention strategy by 6 months
Q: Are there any savings for Ward 12 in this budget?
A: Yes. Following Council approval in 2022, the area rating of Sidewalk Snow Removal has been eliminated which results in a 0.1% tax benefit to the wards within the former municipality of Ancaster (portions of Wards 12 and 14).
Q: I feel that we already pay a lot of property taxes, so why do we have to pay more?
A: One of the most significant challenges we have throughout Hamilton is our City’s sprawl. Over the past many decades, we have built very low-density communities that are expensive to build and maintain (roads, water, sewers, etc). As our City ages, much of our infrastructure has reached the end of its life cycle and requires significant maintenance or replacement. Unfortunately, due to the combination of urban sprawl (which requires a heavy investment in infrastructure) and the failure of prior budgets to adequately fund Hamilton’s asset management and core infrastructure, we now have an infrastructure deficit on core assets (roads, bridges, water, and wastewater) of roughly $2 Billion. Think about the bumpy road you have been on recently; there are too many examples just like it and we don't have the tax base to provide timely maintenance. We need to increase our tax base by intensifying commercial, industrial, and residential properties. If we can generate more tax revenue without having to build and maintain brand-new infrastructure we can become a wealthier city and provide much better value to taxpayers. Unfortunately, we are now being forced to do the exact opposite by the Province (due to Bill 23 and the forced expansion of our urban boundary)
Q: Why is the City hiring more employees with this budget?
A: The additional staff to be hired as part of this budget are to execute new projects or services. Examples of this are the Asset Management process (which is provincially legislated), and the new process for licensing short-term rentals, the vacant home tax, and waterfall enforcement which will all be self-funding (no impact to the tax levy) and may also generate additional revenue for the City.
Q: Does this budget include an increase to Councillor's office budgets?
A: No. That portion of the budget was defeated
Q: Why did you support an increase to the Councillor's office budgets ($600K total; $40K per councillor) and how does benefit Ward 12?
A: I have heard repeatedly that, in the past, Ward 12 constituents did not receive nearly enough communication and that the Councillor's office needed to be more responsive and proactive, so I developed a work plan and it required two staff members. However, the budget provided is not enough to pay two people a fair salary, let alone accommodate any other expenses of running an office. My staff agreed to salaries that are below the lowest pay band of the lowest categorized job classification available. They accepted because of their desire to serve the community and make a positive difference. They should be paid a fair wage for the work they do, but the current office budget can't even come close to doing so.
Here are the enhancements to community engagement already achieved in the Ward 12 office:
• Website (didn't exist previously)
• Monthly Newsletter (didn't exist previously)
• Active Social media (didn't exist previously)
• Commitment to respond within 48 hrs (and often much quicker)
• Staff available to work on policy development
• Making real progress on road safety which was previously ignored
• Community information sessions for proposed development in Ward 12
This is real value for the community and I've heard as much many times over. I hope that these facts illustrate that an investment in staff for councillors' offices is money well spent.
Q: What other factors are impacting the 2023 residential property tax increase?
A: The levy restrictions for multi-residential and industrial properties translate into a tax shift, already reflected in the current residential tax position. For residential properties, this accounts for 0.5% of the current position of 5.8%
Q: Housing prices have increased dramatically since the previous assessment by MPAC in 2016. What will happen to my residential property taxes when my home is reassessed (possibly in 2024)? I can’t afford a tax increase proportional to the increase in my home's assessment.
A: First of all, the market value of your home (which will have significantly appreciated in value over the past few years) is generally much higher than the assessed value used for calculating property taxes. When assessments increase (as is expected to happen as early as 2024) the City’s aggregate revenue from the tax levy cannot increase as proscribed in Ontario's Municipal Act.
As an example, if all assessments in Hamilton doubled, I believe that the general public thinks that their taxes would double and the City would have twice as much property tax income. That is incorrect. We would not have ANY increase in tax revenue because we would need to HALVE our tax rate to maintain the amount of the levy. That is for the City as a whole, but there can be differences for neighbourhoods or properties that have assessment increases greater (or less) than the average.
Q: Why has Council chosen to make such a significant investment in Housing and Homelessness? Isn't this area funded by upper levels of government?
A: The cost to build affordable housing units has roughly doubled during the pandemic (from $250-$300K to over $600K per unit) and funding has not grown. In fact, the Province has drastically cut housing and homelessness funding which essentially downloads those costs to the City during a time when housing costs have jumped dramatically (rent for a one-bedroom apartment has jumped 12% in just one year and a one-bedroom apartment is $1,764) and the need for funding in this area is greater than ever. Since just 2021, funding from the provincial government has dropped by ~$66M (96%). City Staff and Council have been working hard to find the most efficient way to spend money on housing to battle the increasing costs and prevent even more people from becoming homeless which only makes the problem larger and more expensive. The money we are investing is focused on areas to prevent the situation from getting worse. Money spent wisely now can offset the need for much more spending in the future, but we need upper levels of government to invest.
Here is an initiative that Council is taking to provide additional affordable housing in our City. It has minimal impact on the property tax levy but will add 476 housing units to our supply.
Q: Do we have a master plan to solve chronic homelessness and what are we doing to get support from upper levels of government?
A: Staff recently presented an information report on a plan to ‘End Chronic Homelessness’ and the ‘Housing Sustainability and Investment Roadmap’ These new, visionary plans are a 'Whole of Hamilton' approach and are a significant departure from the reactive and piecemeal approach that the City has followed in the past. Investments from higher levels of government will be needed to fund these plans. The mayor and our Director of Government Relations continue to advocate to both the federal and provincial governments for the necessary funding.
Q: Why did you vote to support the Hamilton Police Services operating budget Increase of over $10M?
A: You can read a detailed response to this question here.
Q: What influence does City Council have on the Hamilton Police Services Budget
A: Unlike the remainder of the municipal budget, Council does not have the ability to approve or deny individual line items in the HPS budget. Council can only approve or deny the entire budget. If the budget is denied HPS can appeal the decision to a provincial body which makes the ultimate decision on the budget request.
Q: How does the City's budget process work?
A: Here is a high-level overview of the budget and its components.
There are three components to our municipal budget:
Water, Wastewater and Stormwater rates (these are the rates that homes and businesses pay for the water used). These are out of scope for this newsletter since they are not part of the property tax levy.
Capital budget. This is money that is used to build and maintain items such as our water, wastewater and stormwater infrastructure, roads, bridges, parks, and many other assets in the community.
Operating Budget. These are the funds used to pay city employees and run all of the programs and services the City provides such as garbage collection, snow removal, parks maintenance and so much more.
The process for a new budget begins as soon as the previous one is complete. Council was brought into the 2023 budget process as soon as we took office in November. Staff presented many reports over several months to take us through the details allowing us to deliberate and determine what we would support. These reports can be grouped into the following categories:
Capital requirements - to support the capital budget as noted above
Departmental operating budgets - the money required to run each City department (Public Works; Planning and Economic Development; Healthy and Safe Communities; Finance & Corporate Services; City Manager's office)
Business cases - recommendations from staff for spending beyond their operating budget in order to meet or enhance a service level, or to address an emerging risk to the corporation
Council referred items - spending that Council members want to consider for inclusion in the budget to respond to a need in the community, a requirement within the corporation or to further a strategic priority. Most of the items on this list were referrals from the previous term of council and were ultimately approved in the 2023 budget