The Reality of Budgets

The reality of the time is that government funds are tight.  Both federal and provincial governments are in the process of decreasing deficits, and our municipal government in London is chasing a campaign promise of a 0% tax increases.  Although much of this is done with the rhetoric of eliminating waste, or slimming the supposedly fat coffers of the bureaucracy, cuts do not go on for very long, or go very deep, until they are felt locally.  Martin Hayward, the City Treasurer and Chief Financial Officer recently released his recommendations for the draft 2013 London Budget.  This point stood out to me:

To translate, our Social and Community Support Services budget will save 8.9% due to changes to Ontario Works, but we are actually projecting to cut 12.4%, which equates to a true reduction of $1,100,000.  With the budget of this division primarily going towards the delivery of social assistance, one wonders what a one million dollar cut will mean?  And, like the cut to the affordable housing reserve fund (since reversed), will we go for 0% on the backs of the poorest in our community?

Reading through the full budget proposal tells the more important story of the foolishness of 0% tax increases, with the anticipated cut to Social and Community Support Services being one small symptom of a broader disease.  Mr. Hayward lays out very clearly in the proposal that even a 3.8% recommended increase will not come without cuts to municipal services.  It is clear when looking item-by-item, that holding departments at 0% will be tough enough, and increases are only a fraction of the delayed costs created by our first two years of 0%.

You don’t have to read very deep between the lines that a prolonged tax freeze is simply an exercise in kicking the can down the road, and that we would be best to pay a bit more now, than a whole lot later.

 

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