A first draft of the City of Victoria’s 2025 budget suggests property owners could be on the hook for a 12.17 per cent tax increase next year, the largest for the city in more than a decade.
The early draft, which will undergo changes before it is adopted next spring, anticipates the typical residential property could face a $376 property tax increase and a typical business could see a $1,001 increase.
It includes a $365.6 million operating budget and a $94.6 million capital budget.
The proposed operational budget, which is up $37.6 million from the 2024 version, follows a community-engagement process that identified the public’s priorities to be housing and public safety.
The capital budget is $12 million higher than last year and is meant for the maintenance and improvement of everything from sewers to roads and water mains.
A number of councillors conceded the figures are frightening and most suggested they would be bringing solutions to council over the next several weeks to trim the tax rise to something more palatable.
A one per cent cut in the tax rise requires finding $1.8 million in spending cuts or new revenue.
That process started in a small way Thursday with council voting 8-1 to immediately reduce the tax increase to 12.17 per cent from the 12.77 per cent initially projected in the draft budget.
Council voted to heed finance staff advice and committed all new property tax revenue from new development, estimated to be about $1 million next year, and apply it to the capital budget rather than using it to build reserve funds. That move trimmed 0.6 per cent from the property tax increase.
Coun. Jeremy Caradonna said not only would it bring down “that 12.77 per cent somewhat scary proposed tax lift” but would signal to the taxpayers that council is starting to think about where it can make cuts.
And while there was support around the council table, a number of his colleagues suggested it was just a public relations exercise.
“It’s not a cut in expenditures in any way” and the public are likely to see it as posturing, said Coun. Marg Gardiner.
Coun. Stephen Hammond, the lone vote against the move, called it pandering as it did not have to be done Thursday and instead could have waited until next month’s special committee meetings designed for council to dig into possible cuts.
Hammond said if council wanted to send a signal it ought to be that council is “going to come up with a wide variety of things that are going to reduce the tax lift.”
Mayor Marianne Alto said council’s endorsement of the reduction to 12.17 per cent should not be taken as an indicator that it’s all they will do.
“I think it’s important for us to recognize that staff have provided a host of options, some of which are obvious like this one, many of which are not, which we will explore in the coming weeks,” she said. “I want to be really clear that the public does not see this as the only thing that we’re about to face, because the decisions that we have before us would be very challenging.”
City deputy manager and chief financial officer Susanne Thompson said the fact is the scale and cost of proposed capital investments is significantly higher than in recent years due to increased costs for everything and climate change having a more severe impact on infrastructure than anticipated.
At the same time the city is trying to improve how it manages its assets and that requires investment.
That led council last year to include an annual three per cent tax increase starting this year and running until 2030 to be allocated to the capital budget.
The early draft of the budget includes the Victoria police budget, which is seeking $79.14 million this year, an increase of $7 million compared with last year. Victoria’s share of that budget would be $68.3 million with Esquimalt paying the balance.
The budget includes the city’s share of the Greater Victoria Public Library operating and facility maintenance budget. This year the city’s costs are estimated at $6.06 million, an increase of approximately $313,000.
Budget sessions have been set for council over the next month and a half and a final budget document could be ready for approval in December.
The public will be able to weigh in on the first draft of the budget starting today and will have until Nov. 17 to offer their thoughts.
Final adoption of the budget will happen in April.
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