Property owners in the City of Victoria could face a tax increase of as much as nine per cent this year if an early draft financial plan is enacted as is.
Meeting the city’s $298.2-million operating budget would require an 8.99 per cent tax increase, which would translate into a $251 increase in property taxes for an average household and a $646 increase for a typical business in the city just to maintain the current level of service.
On Friday, city council made its first foray into the 2023 financial plan, and councillors were already asking about how to avoid such a sizable tax increase.
City staff said bringing the tax increase down would require service reductions.
Mayor Marianne Alto reminded council that over the next few weeks there will be time to identify core services that can’t be touched, as well as options or trade-offs that might allow the city to reduce the tax increase.
“It may be that we all want to provide a very robust series of services to our residents in the context of a particularly difficult year,” she said.
Friday’s discussion was the first in a series of budget meetings that will eventually result in a budget report presented to council in April.
The draft financial plan was developed based on a number of factors, including existing financial policies, master plans, action plans, and previous council direction.
Cost increases are being driven by inflation, supply-chain issues, increased labour costs and climate impacts, city staff say.
The previous strategic plan, which ran from 2019 to 2022, directed that annual property tax increases would be no more than inflation plus one per cent.
Inflation is expected to end up between seven and eight per cent for 2022.
The new financial draft report said it used previous direction on taxation as a guide.
The annual Victoria police budget has grown 9.6 per cent to $69.5 million, driven by increased salaries.
VicPD is also requesting funding for seven new staff, four civilian personnel and three frontline officers. Victoria is responsible for 86.33 per cent of the police budget, with Esquimalt picking up the rest of the tab.
The budget will also have to factor in the Greater Victoria Public Library, which is anticipating a 5.95 per cent budget increase in 2023 due to salaries and benefits. The City of Victoria’s share of the 2023 requisition is $5.76 million.
While there was plenty of bad news in the preliminary budget documents, some good news was tucked into the draft: The city expects to see partial recovery of revenues that were significantly affected by the pandemic, notably income from parking, the conference centre and real estate leases.
Just over 61 per cent of the city’s revenue comes from taxation, with user fees accounting for 19 per cent, and parking fees and fines seven per cent.
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