Budget balancing act: HRM juggles priorities as other cities introduce lower rates

As Halifax begins its long budget process, the mayor says he can't guarantee residents won't be paying higher property tax bills next years, but council is determined to limit the hike, and possibly offset some it by reducing the tax rate.

"If we're going to do 4 or 6 per cent, it needs to be something we can take to the bank next year and the year after that because we have chosen to make a change and do without something. Not that we're dipping into one-time things and we'll be even doubly behind next year," said newly elected Deputy Mayor Sam Austin at a budget committee meeting on Friday.

Much of it was summed-up in a pre-budget report delivered to council earlier this month, painting a somewhat gloomy picture of the city's finances, noting the city is facing "significant economic headwinds," including inflation at "levels not seen since amalgamation.”

The municipality’s once strong financial position is showing "signs of erosion" it warns.

The best solution, according to city staff, an 8 per cent increase in property taxes across the board.

One of the first things to be reallocated was $20 million set aside to help pay for a stadium that never got built.

"All, we're saying is, that money was committed, no proposal came forward on the stadium, we do have a problem in the capital fund reserve that we need to address," said Halifax Regional Municipality Chief Financial Officer Jerry Blackwood.

"I say this at great risk to my own marriage: I like what you've done with the funding for the stadium," said Councillor Lisa Blackburn.

Although months away from approval, the proposed budget (with the 8 per cent increase) rings-in at $980 million - a big jump from the $724 million it was in 2016.

"(It's) 30 or 40 per cent. Are people 30 or 40 per cent happier with the services they get from us now than they were in 2016? I don't think so," said Mayor Mike Savage at the meeting.

With a slew of services to fund, council will be making some difficult decisions in the months ahead, and facing inevitable comparisons with other jurisdictions, where the process is already finished.

The city of Moncton lowered its tax rate by 10.3 cents earlier this month, and Monday, Fredericton approved a seven-cent decrease for most current residents.

However, taxpayers in both cities might very well wind-up paying more, thanks to soaring home prices and rising assessments in those cities and elsewhere.

"We did see an increase in our property assessments, so we were still able to benefit from increased revenue, but at the same time, give back to the residents," Fredericton Mayor Kate Rogers told CTV news Tuesday.

"If we left the rate as it was, we'd be taking in more money than we need to run the city," said Halifax Mayor Mike Savage Tuesday.

Noting tax rates have dropped nearly every year he's been Mayor, Savage says there's no reason to believe that won't happen this time, too.

Still, outside factors like inflation will have to be considered in the spending plan.

"For example, fuel costs will probably go up $10 million dollars. We can't stop filling our snow plows, we can't stop filling the trucks that go out and fix the fields," said Savage.

The mayor has previously said 'value engineering' will play a major role in council's decisions in the days ahead.

"(We'll) look at projects and say, 'Is there a cheaper way to do this and still hit the target of what people need?'"

Council likely won't be finalizing its spending plan until sometime in April.