Town now looking at an 8.1 per cent tax increase in 2008 budget
By Jon Yaneff

The Town of Caledon's 2008 proposed draft budget has gone up again. This time a 8.1 per cent tax increase is being discussed, up from the 7.6 per cent that was proposed late last year.

"The 8.1 per cent proposed tax increase boggles my mind," said Mayor Marolyn Morrison. "I'm not very happy with it, but I see where the problems are, such as an infrastructure deficit and for 11 years the Town had no tax increase at all. We have to ask the residents how should we cut back, such as less service in recreation facilities, in the library or on the roads, so we have to determine where we can afford to cut."

A tax increase of 8.1 per cent would mean a tax impact that adds $23.50 for every $100,000 of MVA (market value assessment), so an overall increase of $84.84 to the Town's share of taxes paid on a home assessed at $361,000.

"I don't think the tax increase will stay at 8.1 per cent, I think it will be less," said Councillor Richard Whitehead. "Even if we don't change our budget, we will be able to make adjustments internally through the rate stabilization reserve fund which has the sole purpose to save money, as well as the fact that we're our own banker by not taking money externally so we stay out of debt."

Caledon has the third lowest tax rate in the Greater Toronto Area because it has no debt, Whitehead observed.

Whitehead said other factors to the tax rate are the provincial based surpluses and the potential for little growth, which puts pressure on existing taxes.

Councillor Allan Thompson said he hoped the tax increase won't be 8.1, but he doesn't see it getting below seven per cent right now.

"It's high, no doubt about that," said Thompson. "We've hit a dilemma and the problem is too many things are not getting paid for and we got a lot of deficits, so we can't be sweeping it under the carpet. We might get it down a per cent, but we have some significant costs such as cutting other projects and making sacrifices in the community.

"For quite some time, the tax rate has been too low, maybe it's time we become middle of the road and be realistic, though at the end of the budget we'll have a better understanding of where we're at."

Councillor Richard Paterak added he doesn't think it will stay at 8.1 either.

"I'll see what staff are suggesting, but how it gets lowered is another question," he said. "We're not going to panic at this point."

Councillor Annette Groves commented that 8.1 per cent is much too high because during her three terms on council she has never seen an increase larger than five per cent.

"To hit the residents with an 8.1 per cent in one shot is very high, but we'll have to see if there's some ways to find a decrease before the last two budget meetings."

Town Treasurer Sam Jones commented that though the tax increase number did go up, it is still just a draft and council will discuss the issue further at the next budget meeting Feb. 12 at 1 p.m.

"When council meets further on the budget, they will have some additional information they requested having to do with the impact downloading of the last several years and how much it relates to the budget today and if we extract that and put it into a separate tax rate, let's see what happens," said Jones.

A few factors have led to the tax impact. These include interest on internal borrowing forgiven last year now included in 2008, revenues decreases to be recovered through 2008, increases in salaries, wages, benefits, materials and suppliers and the addition of new facilities.

The senior management team is still reviewing to see if 2007 estimates were reasonable, as well as looking into further 2008 base adjustments, 2008 projected revenues, finalization of the 2008 capital program, municipal infrastructure repairs/deficiencies and efficiency reviews.

Items that are still under review for the next budget meeting will be year-end projections (revenues and expenditures), 2008 estimated revenues and expenditures, the finalization of 2008 Capital Program and the consolidation of 2008 draft current and capital budgets.

There are currently 28 projects being considered by the Town at about $2 million, with a tax levy impact of $952,685 or an additional three per cent.

Also at the budget meeting there was supplementary project requests discussed for several departments at the Town, with the total proposed amount at about $2 million.