2.5% means 2.5% – Remember?
There is no wiggle room to break a promise made in the last municipal election. Mayor Jim Watson made a promise to Ottawa taxpayers that if he was elected mayor, he would not raise property taxes more than 2.5% in any year of his tenure. In fact, after winning the election, in his first speech to City Council as mayor, he reminded us “In my campaign I pledged that I would hold the line on property tax increases to no more than 2.5% a year.” Then, one of council’s first pieces of business was to pass a resolution committing council to the 2.5% cap (MOTION NO. 2/9: … THEREFORE BE IT RESOLVED that the 2011 Draft Budget for all of the City’s tax-supported programs be prepared on the basis of a maximum 2.5% total tax increase; and… BE IT FURTHER RESOLVED that the Long Range Financial Plan be developed with a maximum tax increase of 2.5% for the years 2012 to 2014… CARRIED).
PC leader Tim Hudak has not committed to continuing the uploading of some social program spending back to the provincial level which Mayor Watson was counting on. If Hudak wins on October 6th, and does not upload more services after the end of 2011, the city could be on the hook for some $33M in service costs. To be fair, Mr. Hudak has promised to ease municipal burden in other areas such as arbitration rules but how much that means to the city is a little fuzzy right now.
So feeling that the city will have to scramble to make up that $33M, the Mayor and some councillors are saying that this policy may impact their ability to keep their 2.5% property tax pledge.
But it shouldn’t.
The promise made did not come with caveats or carve outs. Mr. Watson did not say that his pledge was dependant on any one future policy changes of another level of government who have their own independent mandates. The Mayor was quite unequivocal: “that I would hold the line on property tax increases to no more than 2.5% a year”.
On January 20, 2011, I wrote a blog that criticized the Mayor for not bringing in the property taxes lower than the 2.45% increase. It said that based on previous years’ operational changes, property taxes should only have only gone up about 1% or less in 2011. But the Mayor and councillors decided to spend the difference because they knew the future forecasts included huge uploading of services would continue to make his 2.5% pledge easy. It didn’t bother them that the province was incurring record deficits to make this happen and it might be unsustainable.
So now, the city is faced with the reality that things may change and they have not banked for a rainy day. What I see is a Mayor and council now trying to ready the public for breaking a promise and a policy and getting ready to shift the blame. But there is no blame to shift. City Council has to live with the realities of shifting priorities and policies of other levels of government. 2.5% means 2.5%
Just like how Ontario residents had to suck it up and make do when a certain premier made a promise not to raise taxes and then did – twice – and Ontarians had to shift priorities to make ends meet, so does this city council if the province does decide not to continue the uploads. City Council has to keep its pledge not to raise property taxes more than 2.5% and find a way to make ends meet.