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June
1998 Newsletter
Regional
Budget Re-opened: Expressway Back on Table
On
June 11, regional council re-opened the 1998 budget which
had been rushed through on April 24. The earlier budget
had included tax increases of $119 per household this year,
but promised no further increases in 1999 or the year 2000.
Councillors obviously hoped that the huge increase in 1998
would be forgotten by the time of the next municipal elections
in the year 2000. However, it turns out that the April budget
was "contingent on realizing $25 million in savings through
municipal restructuring".
The
subsequent defeat of the most recent regional merger plans,
forced the re-opening of the budget. On June 11, staff presented
a bleak report that forecast a significant deficit that
will require tax increases in both 1999 and 2000, even after
eliminating 450 jobs through a merger of the City of Hamilton
with the Region. The report declared that "to achieve a
tax freeze in each 1999 and 2000 would require additional
staff reductions of approximately 185 to 200 staffing positions".
The
staff report noted that these predictions assumed "no changes
in economic conditions, social services caseloads remain
constant, downloading costs are accurate, and 1998 labour
settlements are favourable (regional employees and police)."
It warned that "an economic downturn could significantly
impact the projection".
Over
50% of the projected deficit in the operating budget will
come from "Capital Financing Costs". This is the ugly future
for the region and its taxpayers that will result from borrowing
for the north-south expressway. Indeed, this increase in
borrowing costs by the year 2000 is only the beginning.
Borrowing for the Red Hill expressway will only total $32
million before the year 2000.
An
additional $53 million will still have to be added to the
debt to finish the project. Staff recognize this impending
crisis and issued another warning in the June 11 report.
Once again they suggested that council consider "deleting
or eliminating some of the capital expansion projects to
reduce this portion of future years' increases". Discussion
is continuing and will include the capital budget.
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