'Economy absolutely remains the wild card'
Oct 27, 2008 - 03:47 PM
By Keith Gilligan
AJAX -- Property owners are facing a three per cent increase in taxes.
Ajax Town Council set the target for the Town's portion of the tax bill, which covers 27 per cent of the total bill.
"In a very dicey economy, a lot of people are feeling the pinch in a lot of ways. The last thing they need is anything less than an absolutely minimum tax rate increase," Mayor Steve Parish said during a meeting of council's general government committee last Thursday.
The 2008 increase was 3.25 per cent and that worked out to about $34 for a home assessed at about $275,000.
"This is the sixth year we've done a (budget) forecast and, without doubt, it's the most difficult one we've done because of the economy," said Town finance director Rob Ford. "The economy absolutely remains the wild card. All bets are off."
To ensure a dropping economy doesn't mean higher-than-expected tax increases, the tax rate stabilization fund is going to be used, he said. "That's why we have it."
The tax rate stabilization fund has $1 million and is used periodically to ensure tax increases are kept as low as possible.
Interest rate drops have cost the Town $475,000 in investment income, Mr. Ford said.
"It's an absolutely volatile market," Mr. Ford said. "Nobody forecast the U.S. subprime (meltdown)."â?¨ The tax increase now sits at 5.79 per cent, but Mr. Ford cautioned, "The number is not staff's recommended increase. We're advising council that is the expenditure level required for 2009.
"Council has delivered the lowest (tax) increases in Durham Region and the GTA in the last few years. To meet the targets, expenditures had to be cut out of the budget," Mr. Ford said.
"Those expenditures don't go away. All we did was push it out" to future years, he said. "Buildings still need to be maintained.
"What's going to complicate 2009 even more is it's a reassessment year. Those are always confusing and fun," Mr. Ford said of properties rising or dropping in value.
The forecast has the estimated tax increase dropping to about 3.25 in 2010 and 2011, before rising above four per cent in 2012.
The driving force for the 2012 four per cent increase is the Sportsplex Community Centre, he said.
The community centre will have a pool, fitness areas and other recreation-related amenities.
Design work on the community centre is being done next year, with construction to take place in 2010 and 2011. When it opens in mid-2012, "it will be debt free," he said, but added, "The down side of community centres is they are fairly expensive to run."
Councillors will consider the budget on Feb. 17 and give it final approval on Feb. 23.
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