Politicians stare down 8.8% tax hike, and don’t expect to cut it

City politicians kicked off deliberations Thursday morning on a four-year budget presented by Mayor Josh Morgan that calls for an 8.8 per cent tax hike for London property owners in 2024.

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City politicians kicked off deliberations Thursday morning on a four-year budget presented by Mayor Josh Morgan that calls for an 8.8 per cent tax hike for London property owners in 2024.

After publishing his budget Wednesday, as legally required under new provincial laws, Morgan presented it to his political colleagues, explaining the difficulty that lies ahead for anyone hoping to reduce the looming tax increase by much.

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“If you are looking to bring the increase down, I will be very clear,” he said. “There are a lot of window-dressing things we can do, we pretty much have to dig into (housing, public safety, transportation) to make any significant moves on the tax rate.”

An 8.8 per cent tax hike would add $115 for every $100,000 in assessed property value.

The meeting began with a staff presentation reminding council about the strong mayor powers and their effect on the budget process and timeline, including:

  • Morgan submitted his budget on Jan. 31 and council has 30 days to make amendments.
  • Those amendments must be approved by a city council majority on Feb. 29.
  • The mayor has 10 days to veto any amendments.
  • There’s then a 15-day period for council to override the veto with a two-thirds (10-vote) majority.
  • The budget, and any surviving changes, will be approved without a final council vote.

Several councillors expressed concerns around the short timeline between the release of the mayor’s budget and the start of talks, and some were confused by the process of proposing changes.

Coun. Elizabeth Peloza, council’s budget chair, said councillors could submit amendments during budget meetings. Morgan also pointed out the draft budget was meant to provide information before he submitted his budget.

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“I certainly understand the points about you just saw this, and you want to think about it,” he said. “There are other mayors today, who will be tabling a budget that no one has seen any part of.”

Ward 12 councillor Elizabeth Peloza
Ward 12 councillor Elizabeth Peloza (Mike Hensen/The London Free Press)

Some politicians also raised questions about consulting with agencies about proposed changes to their budget requests. London Public Library, for example, sought a roughly 20 per cent budget increase in 2024 and Morgan’s budget calls for a 5.5 per cent hike.

“I think we need a bit of time and opportunity to have those discussions,” Coun. Anna Hopkins said. Their concern boiled over early Thursday afternoon when council voted 9-6 to adjourn early in order to consult with outside agencies.

Morgan also gave a presentation to provide more context to some of his decisions. Some councillors objected to his decision to reduce operating budget requests from Museum London and the library to an average increase of 5.4 per cent over four years, but Morgan said his budget would provide the library with the largest budget increases it has seen in a decade.

For the library’s capital project needs, what it referred to as “poverty infrastructure,” Morgan said his budget would give it $5.7 million in 2024 for its most urgent repairs, while funding in the coming years would be held until it finishes a management plan.

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The museum and library boards “will have to figure this reduction out, and there will be impacts,” he said, saying the library didn’t respond to a request from him about what could be cut from their request. “There is huge upward pressure on the tax rate, and on the library side, a 19.9 per cent increase is a lot.”

In contrast, Morgan’s budget gives London police the large budget increase the force sought, bringing its annual spending plan to an average of $167 million during the next four years. Morgan, a member of the police board, said he was swayed by a pledge from police Chief Thai Truong to certain accountability measures. These include appearing before council with metrics on the spending, a new advisory committee, and quarterly crime reports.

“I was not willing to make a significant investment in public safety without an equally significant investment and commitment to accountability and transparency before this council,” he said.

Even with the additional explanations from Morgan, the gravity of the task before council for the rest of the month was not lost on some councillors.

“Does anyone have a Gravol?” asked Coun. Paul Van Meerbergen. “We find ourselves between a rock and a hard place . . . certainly for the length of time I’ve served (across two decades) this would be the largest property tax hike.”

Van Meerbergen
London Ward 10 councillor Paul Van Meerbergen. (Mike Hensen/The London Free Press)

Morgan said the majority of the proposed 8.8 per cent tax increase this year was needed to fund the key priorities of housing and homelessness, public safety and transportation and any reduction to the tax hike would come from cutting funding to those services. Five percentage points of the 8.8 per cent is for police alone, he said.

The four-year budget (2024-27) being debated by council calls for an 8.8 per cent tax increase in 2024, 8.6 per cent in 2025, 5.7 per cent in 2026, and 6.5 per cent in 2027, for a four-year average of 7.4 per cent.

Deliberations will pick up again Friday morning at city hall.

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