Provincial cuts squeezing city budget

Provincial funding cuts are forcing municipalities to rely more heavily on property taxes as a source of revenue, says Ward 11 Coun. Terry Kett, who chairs the city's budget committee.

And Kett said property taxes are a bad way to raise money, because they affect a much narrower segment of the populace – homeowners – as opposed to income or other taxes that draw from a much bigger base.

Kett was speaking Tuesday's committee meeting where councillors found out grants from the province were declining by $2.9 million next year compared to 2013 – $1.17 million more than staff estimates. Since 2011, provincial grants have declined by $7.1 million, and the trend is expected to continue over the next few years.

That means homeowners will continue to be squeezed, since a new funding formula the province is using to calculate grants puts Sudbury at a disadvantage.

“It's an archaic, unfair type of taxation," Kett said.

He also called on the province to announce the grant allocations much earlier in the year, rather in November or December, when cities are already far along into their budget process.

It's bad enough that funding is being cut – the least the province can do is not make it harder on municipalities to find ways to make up the shortfall.

“It doesn't make any sense and it creates a lot more work for our staff.”

On Tuesday, councillors were told provincial funding cuts will be $1.17 million deeper than expected in 2014, meaning the city is getting $2.9 million less than in 2013. Cuts since 2011 total $7.1 million.

But thanks to higher-than-forecast assessment growth and new fees, CAO Lorella Hayes said they're still aiming to keep tax increases in 2014 below three per cent.

@darrenmacd