Tough Times

Jim Cumming,
Publisher

The municipal council of Fort Frances has been quite forthright about the community’s financial shape. The town’s financial books may not be as rosy as they have been in the past decade, but the community’s reserves do cover its total debt.
With that said, it must be understood that those reserves are dedicated to specific tasks and most cannot be transferred into the general revenue of the community. In previous years, council often chose to bring down their reserves to hold the line on tax increases.
Taxpayers were pleased by those actions. Today when the council looks at its operating costs, all those costs must be borne this year from local taxes. Tough decisions will have to be looked at.
Mark McCaig suggested to Fort Frances Council that the problems could not be solved over night and that it would be a long process. Those were wise words. A financial plan must be put together that looks not at the current council’s term, but at the next decade.
What most people do not understand is that the province changed the rules on real assessment for municipalities. That change required municipalities to no longer over charge commercial and industrial properties. A period was put in place to adjust those taxes accordingly so that a house or business building of the same value would pay the same tax. Most municipal leaders have been slow to change the tax base.
The result this year will be that those increases will only be passed to home residences.
The province of Ontario has downloaded many costs to municipalities or regional boards. Former provincial programs are being mandated to be carried out by municipal governments and are necessary to protect Ontario’s citizens.
In Fort Frances, the money collected for these services is greater than the money in the community’s operating budget. It is similar across the district.
There is only one taxpayer. When the federal government downloads costs to the province, the province then downloads those costs to the municipal level, who pass those costs on the local taxpayer.
Municipalities are required to balance their books every year. ... to spend only that which they take in. Both the senior levels of government are permitted to borrow money against the future.
The mayor of Fort Frances has called on taxpayers to help the community solve its financial concerns. I would expect other councils across the district to ask their communities to also solve the problem of increasing taxes.
Howard Hampton in speaking to elected officials at the District Municipal Association this past weekend warned of new downloading costs to municipalities as the province moves to reduce its $5.5 billion deficit. He suggested that provincial connecting link subsidies (subsidies paid to communities for highways passing through their communities) could be greatly reduced or ended. He identified other potential new costs for towns, cities, and municipalities in Ontario.
Communities only have two means of paying for services, taxes or fees. For communities to offer the same services this year that were offered last year, they will have to choose to either increase fees, or increase taxes.
The alternative is to look at cost savings and making decisions to either cancel or reduce programs. Earlier this year council in Fort Frances chose to reduce Blue Box Recycling to every other week and realized a saving of $22,000.
The residents of the district are wise. They can recognize where there is value and where there is waste. They know what services and facilities are valuable to their well-being. I hope that councils will take the time to listen and hear what their constituents are saying.
The electors may end up telling us they are prepared to live with higher taxes. They may end up being the political motivators who can motivate the province and the federal government to again assume responsibility for downloaded services.
The risk is that the finalization of budgets may take longer. The reward is that the community will buy into the decisions of councils through their participation and be prepared to do what is necessary over the long term.