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2017-18 and 2018-19 Municipal Budget

Regional Council approved the municipal budget on Tuesday, April 11, 2017. This year marks the introduction of a multi-year budgeting approach for the municipality. View highlights of the 2017-18 municipal budget.

Frequently asked questions about the muncipal budget.

Below is a Multi-Year Financial Strategy (2017 – 2021) that aligns “how” the administration operates with “why” Regional Council focuses on the Priority Areas it has endorsed. The four-year plan will see Regional Council approve the 2017-18 budgets (operating and capital), and then approve the 2018-19 budgets (operating and capital) in principle. The final two years of budgeting (2018-19 and 2019-20) will appear as estimates.

The Proposed Multi-Year Budget Book (2017-18 and 2018-19) contains both operating and capital expenditures over two years.


Multi-Year Financial Strategy 2017 - 2021

To view the Multi-Year Financial Strategy book, click image below.

Financial strategy 2017 - 2021

 

Proposed Multi-Year Budget

To view the Proposed Multi-Year Budget book, click on image below. In addition, the various sections of the book can be accessed by clicking on the links below.

proposed budget book

Capital Projects interactive map

View what Capital Projects are happening around the Halifax Regional Municipality. The map is interactive. Click on an area in the map to find more information about that project.

 

Proposed Multi-Year Budget 2017-18 and 2018-19

Full Book (pdf)  

Introduction

Corporate Accounts

Summary of Information

Reserves

Public Safety Services:

Capital Projects:

Fire and Emergency Services

Buildings

Halifax Regional Police & RCMP

Business Tools

Public Services:

Equipment & Fleet

Halifax Transit

Transit

Library Services

Parks & Playgrounds

Operations Support

Roads & Active Transportation

Parks and Recreation

Solid Waste

Planning and Development

Traffic Improvements
Transportation and Public Works  
Governance and Support Services: Glossary
Office of the Auditor General  
CAO  
Finance and ICT  
Human Resource Services  
Legal, Insurance and Risk Management Services  


Municipal Budget 2017-18 Frequently Asked Questions

Why increase taxes?
When did the Regional Council commit to multi-year budgeting and why are they doing it?
Is it the municipality’s intent to perform multi-year budgeting for both operational and capital spending?
Does this multi-year approach mean there’s no room to add new projects or initiatives in coming years?
What can residents expect in tax increases?
What do these tax hikes mean to the average household in real dollars?
How much has the average homeowner’s tax bill changed over the last four years?
How did the municipality get into a situation where a tax increase is necessary?
The municipality has healthy reserves. Why not draw from the reserves to cover increased costs?
Interest rates are at all-time lows right now. Why not borrow what we need to cover any shortfall?
Why not take the cap off tax bills? That would generate more money without having to increase taxes.
What if we cut back on capital projects?
Can’t we find more efficiencies within government to avoid increasing taxes?
Will the municipality be proceeding with the larger capital projects (e.g. new police station) immediately?


Why increase taxes?


Based on projections for the cost of existing and new services, property tax revenues, and new projects/programming already approved or on the horizon, a balanced approach that includes tax increases, reducing our debt, and setting aside money in reserves is required.

While taxes are never popular, they reflect the cost that citizens pay for receiving public services.

It’s worth noting there would be a shortfall of approximately $63 million at the end of the next four years if we tried to keep the average tax bill unchanged while:
• funding existing and approved service changes and
• maintaining targets for debt and capital transfers from the operating budget.

In the last four years, the average property tax bill rose by 8.7 per cent. Based on the new four-year plan, the average property tax bill will increase by just 5.6 per cent over that span – increases that we anticipate will be lower than inflation.


When did the Regional Council commit to multi-year budgeting and why are they doing it?


Regional Council motion of Feb. 3, 2016:
“… as part of the ongoing budget process undertaken in 2017-2018 and the following years, a much broader view that looks at the underlying fiscal and economic assumptions and critical key decisions such as the level of the overall capital budget, debt, tax levels, reserves and the capacity to undertake service enhancements.”

While the annual budgeting process has served the municipality’s interests in the past, it restricts decision-making to the short term. As the municipality approaches $1 billion in annual operating and capital budgets, longer-term discipline and outlook are needed to realize major and sustainable change.



Is it the municipality’s intent to perform multi-year budgeting for both operational and capital spending?


The municipality’s new four-year plan will see Regional Council approve the 2017-18 budgets (operations and capital), and then approve the 2018-19 budgets (operations and capital) in principle. The final two years of budgeting (2018-19 and 2019-20) will appear as estimates.



Does this multi-year approach mean there’s no room to add new projects or initiatives in coming years?

There are already several major initiatives for which Regional Council has either given direction or will provide direction in the near future. This includes the multi-pad recreation facility in Dartmouth, the Integrated Mobility Plan, the Cogswell Redevelopment Project, as well as proposed improvements to services the municipality already provides, such as public transportation.

Regional Council sets direction for staff, and it is always the prerogative of Council to adjust course. However, this multi-year approach provides a sharper focus on what’s on the horizon, providing better predictability and more certainty over where tax dollars are allocated.

The municipality is entering a legacy-building period for the region and it’s critical to be able to see a way through all the potential twists and turns in the road. This multi-year approach enables long-term vision, as set out in the Regional Council’s Priority Areas, while providing Regional Council the flexibility to consider enhancing or adding services or capital projects going forward.



What can residents expect in tax increases?

Based on what is foreseen in new expenditures over the next few years, combined with maintaining/improving the levels of service currently provided, Regional Council has approved a four-year plan that tentatively includes the following adjustments based on budget-quality data:
• 2017-18 – 1.8% increase to the average household/commercial tax bill (+$33)
• 2018-19 – 1.6% increase to the average household/commercial tax bill (+$30)

Increases at less than the annual pace of inflation are estimated in each of the subsequent two years. It’s worth mentioning that many levels of government and public entities across the country tie tax increases to inflation. This adjustment in taxes will link the first-year increase to inflation, and then scale the increases back each year, despite the fact it’s likely that inflation will continue to climb over that same period. Over the next four years property taxes will have increased at 70 per cent of inflation.



What do these tax hikes mean to the average household in real dollars?


The average household will pay an extra $33 in the first year. In Years 2, 3 and 4 the increases were presented as one way to stabilize finances within the new framework with similar increases for the average commercial tax bill. For that extra money residents will see an expanded fire service, better roads and enhanced recreation facilities.



How much has the average homeowner’s tax bill changed over the last four years?

Tax increases are generally due to inflation, addition of new services and higher capital budgets. In the last four years, the average property tax bill rose by 8.7 per cent while new services were introduced like the new Central Library and expanded transit.

Based on the forecasted four-year plan, the average property tax bill increase for the next four years will be 5.6 per cent, less than two-thirds of the change residents saw in the previous four years.

The goal is to achieve a balanced budget while seeking efficiencies, manage inflationary pressures, and increase services and capital contributions.


How did the municipality get into a situation where a tax increase is necessary?


We’re thriving as a municipality and need a plan to sustain our success for future generations. If the municipality simply maintained our current approach without increasing taxes, there would be a shortfall of approximately $63 million at the end of the next four years.

Inflation continues to rise at a faster pace than annual growth in property tax revenue and municipal service costs are expected to rise 8.1 per cent over the next four years, while property tax revenues are expected to grow just 3.9 per cent. That’s not sustainable.

In 2017-18, there is $13 million in the budget for service increases. These costs include:
• Additional firefighters: $0.5 million
• Firefighter honorariums: $1.1 million
• Transit Service: $1.8 million
• Operating cost of capital: $3.4 million



The municipality has healthy reserves. Why not draw from the reserves to cover increased costs?

At Regional Council’s direction and approval, the reserves are already actively deployed. Regional Council approves withdrawals when required. The available reserves are affected not only by withdrawals but by planned deposits, like the sale of land. This can be hard to predict.

Dipping into the reserves is one-time money. It might help ease the financial pressure today, but it doesn’t help in the following years when that same amount of money is needed. It’s unsustainable to use reserves to fund annual recurring costs.



Interest rates are at all-time lows right now. Why not borrow what we need to cover any shortfall?


Regional Council has worked hard to reduce the municipality’s debt load and not transfer today’s costs to future generations.

In the past 20 years Halifax’s debt load has been reduced by almost $100-million ($347-million in 1997-98, to $250-million today). When debt is lowered, it decreases servicing costs and frees up more money for programing and services.

Debt-financing simply delays a tax increase. You get the money now, but servicing costs on that debt will increase, and eventually the municipality is left with no other choice but to increase taxes to cover the increasing debt. And future generations should not bear the burden of that extra debt when it can be avoided through prudent financial planning.



Why not take the cap off tax bills? That would generate more money without having to increase taxes.

The assessment cap is a provincial policy and only the province can remove the cap.


What if we cut back on capital projects?


Currently, Regional Council is investing half of the capital budget in what’s called ‘state of good repair’. This recapitalization provides people in the municipality with the programs and services that make Halifax a place where people want to live, work, play and invest. Cutting back on capital projects would be counter to Regional Council’s approved economic strategy for planned growth and building a thriving community.


Can’t we find more efficiencies within government to avoid increasing taxes?


The municipality is committed to continuous improvement by identifying efficiencies and delivering better value for every taxpayer dollar. The CAO-championed Performance Excellence program using LEAN Six Sigma tools will roll out in 2017-18 – the objective being cost-savings, cost avoidance and improved customer services. The new four-year plan restricts growth in expenditures from a base case of $20 million to less than half of that ($8 million) over four years. In addition to these efforts, tax increases are necessary to meet cost of existing and new services.


Will the municipality be proceeding with the larger capital projects (e.g. new police station) immediately?


There are currently funding strategies in place for several capital projects. However, many of the larger strategic projects that were approved by Regional Council in 2014 (e.g. new police station) are currently being considered as part of a multi-year approach to capital investment. Before starting these larger projects, Regional Council must direct staff to initiate next steps with due diligence – including cost assessment and project planning.