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County proposes a big hike in taxes

Shire Hall is proposing a 7.2 per cent increase to the tax levy

$70.8 million operating budget in 2023 versus $66.7 million in 2022

$2.9 million in new debt servicing approved in the capital budget (about a 5 per cent hit to the tax levy) doesn’t kick in until 2024.

$25 million annual Roads Plan also set to begin in 2024

Shire Hall is looking to spend $71 million to fund its business in 2023. Prince Edward County waterworks utility will spend $11.5 million to fund its operations.

The bottom line is that the tax levy—that is, the amount needed from property taxpayers to fund the County’s business will rise from $43.9 million to $47.0 million in 2023—a 7.2 per cent increase.

In 1998, the total operating tax levy paid by County taxpayers was $10.3 million. In 2023, taxpayers will pay 4.7 times more, while the County’s population has remained roughly unchanged. The tax levy increase over this 25-year span implies a growth rate of 6.2 per cent per year.

It is unsustainable. It also far surpasses inflation which has averaged just over 2 per cent per year over this period.

Obscured in this blizzard of numbers is that Council has already agreed, in principle, to big transformational change—the redevelopment of McFarland and a $25 million per year roads plan—neither of which will hit the taxpayers until next year. When fully phased in, these projects may push the tax levy to more than $75 million each year—a 70 per cent increase over 2022. It poses a massive wallop to taxpayers in the years ahead.

Earlier this month, after three days of deliberation, Council passed its capital budget of $85.1 million. These funds are used for repairs, rehabilitation and reconstruction of things the County owns—assets, including roads, bridges and buildings. Council also approved $25.1 million in spending for water and wastewater upgrades.

Staff wages and benefits account for a significant percentage (38.6 per cent) of the operating budget for a total of $28 million. This is an increase of $2.5 million over last year.

The General Government line has been on a steady rise since 2019. That year, Shire Hall spent $12.3 million on council, management, the Clerk’s office, Information Technology, HR and such. In 2023 Shire Hall proposes to spend $18.2 on General Government—a 48 per cent increase since 2019.

Contracted and professional services, equipment, supplies and materials account for 36.7 per cent ($26 million) of the proposed budget, an increase of $1.6 million from 2022. Services provided from external agencies and boards consume 21.9 per cent ($15.5 million) of the budget, while 1.9 per cent ($1.3 million) is earmarked towards long-term debt.

According to Director of Finance Amanda Carter, four reserve funds also require attention. They include the capital sustainability reserve, road equipment and fleet reserve, the IT reserve and the fire equipment replacement reserve. The 2023 operating budget proposes a transfer of $9.7 million to reserves.

Budget deliberations will begin Wednesday, February 22, and may be viewed on the County’s YouTube Channel. The Times will have full budget coverage following these meetings.