The first draft of the City of Victoria’s 2024 budget would result in a tax increase of 8.37 per cent next year for property owners in the city.
The early draft, which will be tweaked before being adopted in April, includes a $328-million operating budget and $82.6-million capital budget. It would mean a $248 tax increase for the average household and a $640 tax increase for the typical business.
Mayor Marianne Alto said the draft document contains little in the way of frills or discretionary spending.
“I think it’s fair to say that what staff have proposed as a draft budget is in fact what staff believe is necessary to ensure that those services on which people rely can be maintained at an adequate level,” she said. “There’s nothing on here that’s rich. There’s nothing on here which is unnecessary.”
The proposed budget, which is up $12.33 million from the 2023 version, follows a community-engagement process that identified the public’s priorities as housing and public safety.
Coun. Jeremy Caradonna said the proposed spending increase reflects rising costs due to inflation and necessary investments.
“We’re actually not investing very much in the other things that we’re supposed to be investing in, like arts and culture, like housing,” he said. “I’m worried that as we deal with this high inflationary world that we’re in, we won’t be making those kinds of investments that really increase the livability of the city.”
The budget does include small amounts of new funding, such as an additional $250,000 to support Canada Day, ongoing funding for the bike valet program and money for the city’s music strategy.
But the bulk of the tax increase is due to inflationary costs, which add 5.86 per cent to the property tax bill, and the $72-million budget proposed by the Vic PD. Victoria is responsible for 86.3 per cent of the Vic PD budget, which would add a 2.4 per cent increase to the tax bill if approved.
Coun. Marg Gardiner said while it’s necessary to invest in the city’s infrastructure, it’s time to rein in some of the city’s other spending. “We are entering very rough times for the city and for residents in everything, not just with this tax bill, but with everything,” she said.
Gardiner called for a close examination of the city’s funding programs and grants to see if there are areas where cuts can be made, especially if work on homelessness has resulted in fewer people needing city resources.
The capital spending budget is proposed at $82.6 million for the maintenance and improvement of everything from sewers to roads and watermains.
According to a city staff report, the scale and cost of proposed capital investments over the next five years is significantly higher than in recent years, due to cost increases, the impact of climate change and anticipated construction cost increases.
The report also noted the city’s decision in 2020 not to increase property taxes during the pandemic meant a loss of millions that would have been in reserve funds to tackle some infrastructure projects.
As a result, city staff have recommended an annual tax increase of three per cent starting in 2025 to be allocated to the capital budget to fill the funding gap.
Staff also recommend borrowing to pay for $63 million worth of larger infrastructure projects, like replacing vehicles and heavy equipment, the Government Street revitalization project, transportation improvements, public washroom improvements and a park redevelopment program.
On Monday, Alto defended the city’s decision not to raise property taxes in 2020, noting it was intended to provide relief.
“It wasn’t a hell of a lot, to be perfectly honest, but it was all we could do,” she said.
The numbers kicked around the council chamber Monday will likely change before council meets again in January to start work on the details of the budget. Last year, for example, the draft budget started with a nine per cent tax increase before it was dropped to 6.15 per cent.
In January, the debate will focus on what can be trimmed from the budget and how the city intends to pay for it all.
The city staff report floated the idea of raising additional revenue from increasing parking fines, some parking rates and fees for the use of public spaces like boulevards, sidewalks and streets.
Alto said she was encouraged by some of the feedback in public-engagement sessions that people are willing to consider things like corporate sponsorships to defray costs.
“That’s just one example of the things that I think we’ve heard from staff today that actually give me hope that we’re not just looking at property taxes and that we will find better ways to fund things,” she said.