Done

Tax levy comes in at half the increase proposed

A week ago, the proposed budget recommended spending $91 million to run the County’s business in 2026, up from $81 million budgeted for this year—a 12 per cent increase. It raised the proposed 2026 tax levy by 11 per cent, from $54 million this year to $60.1 million.

But as one council member noted during the budget debate last week, his wife wouldn’t let him back in the house if he came home with that scale of a property tax increase.

So it was that over the course of the week, $3.3 million was pared from proposed 2026 expenditures. This reduction flowed directly to the tax levy. The result is a 5.5 per cent increase in the levy for next year. It will raise $56.8 million in property taxes.

Mayor Steve Ferguson commented that by working collaboratively, Council found the right balance.

“Together as a group, Council worked to reduce the impact on our residents while continuing to deliver high-quality services and invest in critical infrastructure as outlined in our Asset Management Plan,” said Mayor Ferguson in a statement.

There was joy and self-congratulation around the council table for wrestling the increase down from the homewrecking to merely burdensome. That the impact on ratepayers is still twice the inflation rate seems nitpicky.

Two compulsory points.

First, the year-over-year spending numbers are not based on real life. They are estimates—both this year and next. We won’t know how well the municipality fared against its estimates until next August. By then, the memory of the existing spending decisions will be like whispers on a crowded streetcar— faint and quickly forgotten—when real life happens.

The second point: Readers may encounter another number presented as the tax levy increase in 2026 from other sources, including Shire Hall. It is a derived number— meant to distract from the real purpose of the budget, that is, determining how much needs to be spent to keep the business of Prince Edward running next year. That cost increase is 5.5 per cent.

Reducing this percentage increase because the tax base has grown (by new homes) distracts from this function. There are myriad reasons why the County will spend more money next year than last, but the 100 new homes built this year just isn’t a meaningful driver of costs next year.

The use of the lower number is a marketing pitch rather than solid financial reporting. It has the longer-term risk of eroding credibility.

GETTING TO 5.5 PER CENT
So what happened? How did an 11 per cent tax levy get halved? The bulk of the savings came from removing a road project from the budget. Just over $3 million was set to be extracted from a reserve fund (formerly the Gas Tax Fund) to pay for the widening of a portion of County Road 1, close to Picton’s traffic circle. The project was intended to support higher truck volumes resulting from the proposed residential development in Picton.

Councillors felt this was a project that could be shunted forward to a hazy future. That money was therefore freed up to spend on rural road construction. The money was sitting in a reserve. Council removed it and applied it to road spending in 2026, thus reducing the pressure on the tax levy for this work by $3 million.

Shire Hall has committed to a report laying out all the changes in detail.

OTHER BITS
The 2026 budget includes $400,500 for ongoing physician recruitment. It has earmarked $473,000 to help lowincome households pay their property and tax bills. It increased the municipality’s contribution to PEFAC (Prince Edward Fitness and Aquatics Centre) from $70,000 to $150,000—though Council insisted that $80,000 of the fresh funding be sourced internally from the Community Services, Programs and Initiatives department. The extra money is needed to cover a significant rent increase sought by PEFAC’s landlord.

WATERWORKS
The combined operating expenditures for the waterworks utility will rise by 9 per cent in 2026 from $6.6 million this year to $7.2 million. It will spend $3.8 million to pay down debt in 2026, and it will have enough leftover from water bill revenue to put $1.7 million into reserves.

The waterworks utility has earmarked about $6.5 million for capital projects in 2026. More than half—$3.5 million— will be spent on the underground pipes related to the reconstruction of Barker Street in Picton. Bowery Street reconstruction, also in Picton, will consume another $1 million. The utility has set aside $297,000 to demolish the water tower in Wellington.