Tough dilemma

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, though, it must be understood 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. And 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 last week suggested to council the problems could not be solved overnight. 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 the province changed the rules on real assessment for municipalities, which required municipalities to no longer over-charge commercial and industrial properties.
A period was put in place to adjust those taxes accordingly so ta 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 only will be passed to residences.
The province also has downloaded many costs to municipalities or regional boards. Former provincial programs—necessary to protect Ontario’s citizens—now are being mandated to be carried out by municipal governments.
In Fort Frances, the money collected for these services is greater than the money in the community’s operating budget. And it is a similar story right 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 to the local taxpayer.
And the end may not be in sight. Local MPP and Ontario NDP leader Howard Hampton, speaking to elected officials at the Rainy River District Municipal Association’s annual meeting last weekend in Devlin, warned of new downloading costs to municipalities as the province moves to reduce its $5.5 billion deficit.
He suggested provincial “connecting link” subsidies (subsidies paid to communities for highways passing through them) could be greatly reduced or even 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 hike taxes.
The alternative is to look at cost savings and make decisions to either cancel or reduce programs. Earlier this year, for instance, council chose to reduce “Blue Box” recycling to every other week and realized a saving of $22,000.
District residents 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. Hopefully, 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 persuade the province and the federal government to again assume responsibility for downloaded services.
The risk is that the finalization of budgets may take longer. But 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.