City Budget 2022: Council trims tax rate increase to 2.8%

Council wielded a surgical knife trimming the proposed tax rate increase from 3.8 percent to 2.8 percent in the 2022 municipal budget.

The increase represents an additional $86 next year on the average home assessed for tax purposes at $241,000 in 2019.

Among the budget changes backed by council:

  • $3.7M in savings found by civic administration across many departments and programs to ‘right-size’ budgets
  • Annual increase of $640,000 to cover inflationary costs at the Middlesex-London Health Unit
  • Increasing fines for illegal parking in private lots patrolled by municipal by-law officers rise $15, generating $100,000 more revenue
  • Accepted $2.8M in one-time savings because of pandemic impacts to Childcare and Ontario Works
  • $580,000 one time support for RBC Place Convention Centre anticipating pandemic impacts in 2022
  • $650,000 reduction in ongoing expenditures aimed at slowing the growth of the municipality’s infrastructure gap
  • $100,000 reduction to city hall’s Athletic Travel Grants
  • $258,000 reduction to annual proactive boulevard tree trimming and reduced grass trimming to naturalize more park space

Councillors clashed over the reduction of funds to slow the growing infrastructure gap, a decision that only shaves 0.1 percent off the tax rate increase.

“The proposal here is to make a permanent reduction,” said Councillor Stephen Turner who acknowledged the financial plight of many taxpayers. “But over 10 years, it’s $6 million taken out of our infrastructure maintenance funds.”

Ultimately, the reduction was approved 10 to 5.

“To me this is all about the choices we make when budgeting,” explained Deputy Mayor Josh Morgan. “There’s some flexibility to this one, but you got to be very conscious of the long-term impacts.”

The greatest single source of savings in 2022, $3.7 million, comes from an internal review of departmental budgets performed by civic administration.

Several councillors said those savings were a direct result of London’s multi-year budget process.

“Having staff free to examine the budget very deeply and looking for where cost savings can be found,” said Councillor Maureen Cassidy.

Budget reductions proposed by civic administration to a pair of popular programs were rejected by council.

  • $10,000 will not be removed from the Neighbourhood Small Events Fund
  • $250,000 will not be removed from the Neighbourhood Decision Making Program

There was unanimous support for a $25.9 million capital project to begin electrifying London Transit’s fleet of buses.

The electric bus proposal does not have an impact on the tax rate.

“Make the buses quieter, better for the environment, and save money in the long run,”said Councillor Jesse Helmer. “This is really the first step to moving forward on a really good overall idea.”

The financial impact of next year’s increase to minimum wage is still being evaluated, but the city treasurer believes the impact can be absorbed within existing departmental budgets in 2022.

This year’s budget update represents year three of city hall’s 2020-2024 multi-year budget.

A 2.8 percent tax rate increase lowers the average annual tax increase over the four-year budget to a still hefty 3.6 percent.

Council will finalize the 2022 Budget Update at a meeting on December 21.