One nine-letter word is enough to tell all Chatham-Kent taxpayers why there should always be a budget with a municipal tax increase.
Inflation.
That dastardly word has smacked the daylights out of us in recent years, pulling more and more dollars out of our pocketbooks and wallets.
Except, the municipality has to dip in there at the level of the Consumer Price Index to keep up with inflation as well.
C-K CFO Gord Quinton brought up an excellent point in recent pre-budget discussions with the media that municipalities are the only form of government in Canada that have to ask for funding to keep up with inflation. At senior levels of government, increases flow right into their coffers through increased income taxes and higher sales and service tax revenues from goods that are sold at a higher price due to inflation.
Their cash intake increases to keep things running, whereas municipal administrators must seek such finding annually.
And when must-do projects or funding is put off at budget time, the issue compounds the following year. Avoiding a punch to the pocket one year invariable leads to a flurry of blows in subsequent years.
Inflation this year makes up about 1.84 per cent of the proposed increase. The rest is a result of pushing needs down the road.
During the pandemic, the municipality delayed a number of projects and needs, and now those matters, in this new four-year budget process (we are in the second year of it) need attention.
Hence a 5.53 per cent increase last year and a proposed 5.96 per cent starting point for this year’s budget season.
It was anticipated last year we’d have to face an 8.14 per cent increase this time around. Some funding changes from senior levels of government, as well as user-pay income and other sources dropped the number to where we are at.
There will be some jostling, as is the case with every budget process. But if the 2025 tax hike dips below five per cent, we would be surprised. We would like to be wrong, however.
