City of Hamilton’s 2022 Deficit Over $25-Million with Higher Than Previous Years Tax Increases Forecast for 2023

The City of Hamilton’s 2023 budget meetings are now well underway.

Hamiltonians should expect higher-than-usual tax and rate increases this year due to inflation and the costs of years of deferred costs, and deferred infrastructure maintenance.

Water rates are forecast to increase by 6.49 percent, the City property tax rate is forecast to increase by 6.9 percent while dipping into the City’s remaining reserve funds, and the City’s tax-supported capital is forecast to increase by 0.92 percent while increasing the City’s multi-billion dollar infrastructure deficit.

Additionally, Council will need to cover a forecast $16.4-million deficit for 2022. The City’s budget office states “financial pressures from the COVID-19 pandemic response” and “$76.4 M in pressures related to COVID-19 response and recovery efforts for 2022” are the primary causes of the deficit.

The City is forecasting to spend $23.0 million on COVID “response and recovery” in 2023.

2022 Tax Supported Operating Budget is forecasted at a $23.7M deficit ii. 2022 Rate Supported Operating Budget is forecasted at a $2.9M deficit iii. 2023 Preliminary COVID-19 Response and Recovery projected at $23.0M

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City of Hamilton slide showing budget deficit projections.

The meeting was not live-streamed. The City Manager’s Office has not released any records or further records to the public.

The slides from City management state COVID recovery efforts will be a major budget pressure in 2023.

Major Rate (Water) Increases for Next Three Years

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City of Hamilton slide showing projected water rates for 2023 to 2025

Hamiltonians should expect a 6.49 percent increase in their water rates in 2023, according to another slide.

The 2023 increase will bring the cost of 200 cubic metres of annual water use to approximately $877.48.

City Operating Budget Increase Over 8% for 2023

The City’s draft 2023 operating budget is not yet public. A slide was shown to Council during a November 9, 2022, orientation session indicating staff believe an 8.1 percent operating budget is necessary for 2023.

The slide shows a 4.3 percent budget increase for 2024, and 3.9 percent for 2025.

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City of Hamilton slide showing projected operating budgets for 2023 to 2025

 

City Capital Budget Increase Could Go Above 1%

The new members of Hamilton’s City Council state they wish to address the City’s multi-billion dollar infrastructure. They need to increase annual infrastructure spending to decrease the deficit’s growth. With decades of neglect, it will take more than a single council term to close the gap.

The draft Capital Levy increase is 0.92 percent, but it comes with a reduced number of projects due to ‘staffing constraints’ and inflation.

During Friday’s initial capital budget meeting, many members of Council probed if this is the best value for money considering the extent of the City’s infrastructure deficit.

Members of Council questioned only increasing the asset management levy by 0.5 percent for 2023.

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City of Hamilton slide showing the Tax Supported Capital Financing Plan 2023-2026

Council will further debate the capital budget on Friday December 2, with approval expected at the December 7 Council ratification meeting.


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Originally published: November 27, 2022
Last edited: November 27, 2022
Author: Joey Coleman
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2 thoughts on “City of Hamilton’s 2022 Deficit Over $25-Million with Higher Than Previous Years Tax Increases Forecast for 2023

  1. Pingback: Hamilton Police Request 6.71% Budget Increase for 2023 | TPR Hamilton | Hamilton's Civic Affairs News Site

  2. Pingback: TPR Newsletter Email For December 16 2022: 2023 City of Hamilton Budget Briefs | TPR Hamilton | Hamilton's Civic Affairs News Site

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