|
March 2004
Newsletter
The Expressway and the Draft 2004 City of Hamilton Budget
The 2004 draft budget baldly admits that spending on the Red Hill Creek Expressway is creating major financial difficulties for the City of Hamilton.
The opening paragraph of the report on this year's capital budget declares: "The City's tax supported capital budget is at a sustainability crossroads. That is to say, due to two major City capital initiatives, which are now past the planning stage and into major funding commitments and implementation (Red Hill Valley and Solid Waste Management Master Plan), the rising debt load is starting to constrict available capital dollars for other City projects. How to deal with this most important capital issue will be the focus of this year's capital report."
Red Hill spending in 2004 is set at $32.9 million - just under one-quarter of the entire capital budget of $141 million.
However, the $141 million is only the "affordable" portion of the budget. An additional $105 million in capital spending is required but can't be paid for. As a result, 235 projects have been designated this year as "unaffordable".
The budget report consequently refers to a "dramatic 50% decrease in capital funding for regular programs (roads, facilities,.e.t.c.) which would take effect in 2004 due to increased debt attributable to the Red Hill Valley Project and the SWMMP." It also warns that "the amount of debt to be issued in the next few years (RHVP & SWMMP) and the inadequate redirection of tax levy dollars to the overall capital program is going to constrain the City's ability to deal with all of its infrastructure needs."
In response to this crisis, the City wants the provincial government to increase its subsidy for the expressway "to reflect the fact that Hamilton is building a new road that, once linked with the east/west expressway, will act as a major highway of provincial significance and benefit".
More specifically, the budget report recommends that the City "pursue a new deal on the East/West & North/South Expressway that more closely reflects the traditional cost-sharing split of 75% / 25% for Province/City contributions".
"Traditional" in this sentence refers to 1974! The current provincial funding subsidy was agreed to by Hamilton eight years ago in 1996. The following year the province ended all its other subsidies of local roads.
Expecting Queen's Park to reverse this policy is quite a leap of faith, and the budget authors apparently realize this, because they suggest an alternative way to deal with the crisis - the transfer of $60 million from the Hamilton Future Fund into the capital budget.
The Future fund (perhaps about to renamed the "Past" fund) appeared in 2001 when the City sold Hamilton Hydro to itself for $137 million.
But using $60 million of the hydro monies will still leave 139 projects "unaffordable" in 2004, and at best will only postpone the crisis caused by the expressway spending.
Next year, the expressway budget demands $33.7 million more, and in 2006 it will eat up another $35 million.
|
