Town Budgeting 201 - a second year explainer

Back in the days when I was reporting on municipal budgets rather than voting on them, there was a predictable set of headlines that would accompany the stories.

The first set would be something like: "Staff suggest tax hike of XXX percent, council to review" "Your taxes likely to rise in first look at budget" A few days or a week later, the council would meet and jettison some of the items requested, and new headlines would read something like: "Council whittles down requests" and, "Elected officials rein in budget spending" Finally, at the end of the budget season, the headlines would be more like: "Small tax increase to pay for essential services" or: "Council acknowledges small tax hike necessary"

But, that's not how the story plays out any more, at least not in Collingwood. The budget is unveiled gradually and in pieces with additions rather than subtractions.

I'm not entirely sure why, but, here in Collingwood, the first step (after the town staff do a whole bunch of figuring and behind-the-scenes work) is: town councilors receive a large budget document. In this big binder, there is discussion and a lot of figures, but there is no suggestion of a final total or a final ask. We're also given an additional set of pages which does include some figures and some scenarios for taxation.

Next, we (most of us) read through the documents and have a meeting, at which we are provided with presentations from the various department heads and staff members about the things they did last year and the things they were supposed to do but didn't, and why, and the stuff they want to do this coming year, and how much that will cost. This first meeting is what's I call a 'listening only' meeting. We're not encouraged to ask a lot of questions; just listen. After about three hours of the presentations, we councillors are sent home with an additional package of papers, this one with figures containing all the 'extra' spending hopes and dreams of the staff. I learned last year that I could anticipate the big final ask by listening carefully to the presentations for words like, 'we hope' and 'if council agrees,' and jotting down any number discussed as a 'service enhancement'. Last year, that 'enhancements' package totaled about 1.7 million dollars, this year, it was $2.2 million.

Then, over the next couple of days, we councillors were supposed to email the CAO and the relevant department head, any questions about the proposed budget and the requested additional spending.

Next, at a second meeting at which about an hour was spent on the budget, the emailed questions were addressed verbally, during a 15 minute period at the end of the meeting. Again, this part of the budget meeting was for listening, not asking questions or for councillors to discuss things amongst ourselves. There has been some question in the days since whether we were going to receive written answers in addition to the verbal answers.

And now, a third meeting has been added, to be held tonight, after our regular council meeting. Several items from the 2.2 million dollar wish list have been removed by staff, but one big item has been added, so it's still close to 2.2 million dollars in 'additions', and this is where the discussions among councillors and motions to remove or add items will take place.

Through this year's process, the headlines have been: "Guess what Collingwood? Your taxes could be going down in 2020!", and "Council questions inquiry costs, asset sale proceeds, and mobile parking in budget session" (Collingwood Today). Also: "Feeling the pressure: Collingwood's 2020 budget to address town growth, says CAO" and "What will be the final bill for the Collingwood judicial inquiry?" (Simcoe.com).

Right now, if we councillors vote yes to every single thing that's in the base budget plus the 'service enhancements', you're looking at a tax increase of about a hundred bucks, if your house is assessed at $324K. Except, we in Collingwood added a few years ago, a 'capital levy' of 0.75%, to save up money for projects. So, even if we get to a zero percent tax hike, you're still adding .75% or about 17 dollars for roads and so on. Some of it will be to put back the money we dipped into from our savings (aka reserves) to pay for the Judicial Inquiry.

But, wait, there's more complication!

There are numbers that we don't know about yet, and while they are nodded to and hinted at, they're not final: the growth numbers. More houses were built here in Collingwood in 2019, and people moved into them and started paying their property taxes, but those taxes aren't included in our budget yet because MPAC doesn't report them to the town until early next year. In a growing community like ours, it was about 1.7 million dollars in what's called a 'surplus' last year. The final figure may well be more than that this year, or possibly less; we councillors don't know and yet are being asked to set a tax rate to provide enough money to provide all our necessary services. So, even while we're debating the budget numbers, we know those numbers are not really... well, real, because the so-called 'surplus' is coming.

And finally, to be clear, there's virtually ZERO chance your actual tax bill is going down, even if we pass a zero tax increase, because a) your house is very likely worth more this year than last year, and b) the tax rate we councillors set tonight or tomorrow isn't your whole bill: the school board is in there (rates set in May or June), and the County passed its budget earlier this month, with a 2% increase.