Heading into budget season, Woolwich finds itself already behind the eight ball, in large part due to the provincial government.
That township’s funding from the Ontario Municipal Partnership Fund (OMPF) had been cut by 15 per cent for 2018. It will also take a hit when the province hikes the minimum wage to $14 an hour as of January 1. Combined with a reduced forecast for growth next year, Woolwich is looking at reduced revenues that would require a 3.25 per cent tax hike just to get back to square one, says director of finance Richard Petherick.
The province’s OMPF grant will drop to $625,800 next year, down from $736,200 in 2017, he told councillors meeting last week. The $110,400 difference is the equivalent of a 1.13 per cent reduction in the township’s overall budget.
The decrease comes as the province appears more focused on Northern Ontario and the rural areas, he explained.
Petherick said later that he expected funding might be frozen at its current levels rather than cut by the maximum amount, as Queen’s Park promised no municipality would see grants fall below 85 per cent of the previous year.
“Other municipalities have had reductions in the past. Woolwich has had increases in the last few years, however,” he said, pragmatically, of the 2018 cut.
“Still, it was a bit of a shock. It’s a good-size hit.”
The township is looking for the province to reconsider its plan for 2018, though not banking on anything.
Meanwhile, as with every other employer in the province, Woolwich faces increased labour costs when the minimum wage jumps to $14 an hour from $11.60. That change, which largely applies to recreation staff such as lifeguards, will cost the township an extra $110,000 to $140,000 next year, said Petherick.
As well, the township has lowered its growth forecast for 2018, now expecting assessment to increase by 0.5 per cent instead of 1.5 per cent, shaving the better part of $100,000 from projected revenues.
While growth will continue, there’s a gap between the construction of new homes and the addition of new properties to the tax rolls as the Municipal Property Assessment Corporation (MPAC) carries out new assessments.
Eventually, those revenues will come on stream.
“We expect supplemental growth will rebound in the coming years,” said Petherick.
Though the combination of these factors amounts to a large shortfall in revenues that’s equivalent to a 3.25 per cent tax hike, Petherick said he doesn’t expect that will be the starting point in the 2018 budget deliberations.
“We have to find ways of mitigating these reductions,” he said of work now underway to prepare budget documents that will be released later this month.