LONDON CITY BUDGET

Taxed near the max

Jonathan Sher Sun Media December 18, 2008

London is in poor fiscal health and its taxpayers among the most burdened in Ontario, a new study suggests. Among hundreds of cities and towns in the province, London was rated closer to the bottom than the top in the study jointly done by the province and an association representing municipalities. Seventy per cent of Ontario municipalities were deemed in better fiscal health than London and only 20 per cent worse -- that, before the global economic meltdown threatened municipal bottom lines. With the city heading into a tough budget year, the study shows London taxpayers already spend a greater share of their cash on property taxes than residents in all but 10 per cent of cities and towns. The findings, released as city hall brass put the final touches on a draft budget that would raises taxes and charges by 4.5 per cent, don't surprise Coun. Nancy Branscombe, who's heard Londoners complain they pay too much for too little service. "It was clear our taxes were among the higher ones in the province, but we weren't getting value for that money," she said yesterday. How much taxpayers can afford is a product of their income -- a key measure every city council should heed, said Doug Reycraft, the mayor of Southwest Middlesex and a former president of the Association of Municipalities of Ontario, which did the study with the province. The economy of Reycraft's town was deemed in the bottom 20 per cent of the province by the study, but taxes there are low -- also in the bottom 20 per cent. "You certainly have to be mindful of the ability of your taxpayers to pay," he said. Exactly why Londoners pay higher taxes has been a subject of debate. Some on city council pointing to slow growth in the city's tax base. But on key measures of its tax base, London fares better than 70 per cent of municipalities. But in the costs of social and emergency services, only 10 per cent of Ontario municipalities pay more per household for those than London does. Half that problem would disappear under a promise by Premier Dalton McGuinty's Liberals to assume welfare costs now shared with cities and towns between 2010 and 2018. That would leave one key cost driver in London's budget -- police, firefighters and paramedics. While it's a cost faced by all cities and towns, the burden is worse in London because its household income is below the provincial average, says city finance chief Vic Cote. Emergency services that once consumed one in four London tax dollars now consume one in three, he said. In seven years, for example, the London police budget has grown from $48 million to more than $76 million projected next year, a jump of nearly 60 per cent. "The police budget is out of control," Branscombe said. While some on council have pushed for tighter oversight and control over the police budget, their voices have been in the minority, she said. London isn't alone among cities in the region faring poorly on measures of fiscal health. Hamilton and Windsor fared slightly worse, St. Thomas slightly better, Woodstock noticeably better and Kitchener ranked in the top 20 per cent. --- --- ---

FISCAL HEALTH How some regional cities ranked in the study, on a range from one -- the best -- to 10: Kitchener 2 Woodstock 5 St. Thomas 7 London 8 Hamilton 9 Jonathan Sher is a Free Press city hall reporter.