Halifax kickstarts budget process by removing proposed 9.7% tax hike

Halifax councillors say they are prepared to make hard cuts in the upcoming budget to keep property tax bills from steeply climbing for the average resident, as the city faces a shortfall of more than $60 million.

During the first budget meeting of the 2024-25 fiscal season Tuesday, HRM councillors debated a motion to launch the budget process with aninitial proposal from city staff toraise property taxes by9.7 per cent.

The increase would amount to an extra $223 on the average homeowner's annualbill.

Staff said that increasewould cover a revenue shortfall of $68.7 million, and maintain funding for regular city services and projects council has planned. However, the staff proposalnoted that 9.7 per cent estimate could be adjusted when thisyear'sproperty assessments are revealed.

But in light of the housing crisis, rising inflation, grocery prices and expenses, many councillors said they have no intention of eventuallyapproving a hike that high.

"None of us really believe that's going to happen, none of us really believe it's acceptable," Coun. Tim Outhit said during the meeting.

Outhit amended the motionto remove the proposed tax increase and simply direct staff to develop the upcoming budget according to council's strategic priorities.Those include community safety, affordability, adapting to climate change, planning for smart development, and a homelessness strategy.

"Then get to work and earn our pay," Outhit said.

"We don't know where it's going to end up, but even to set the expectation to staff and residents that it could be 9.7 by leaving it in there, I think would be wrong."

Council approved that amended motion by a vote of 13-1 Tuesday evening.

Over the next five months, various departments within HRMwill present their own budgets to the committee and councillors will have a chance to propose cuts following those presentations. The final budget will be approved in April 2024.

Coun. Tony Mancini said that means deciding on what are absolute "musts" that can't be touched, and then considering projects and programs that could be reduced, cut, or paused.

"Do we need the Porsche or can we survive with a project that's more of a Ford?" Mancini said.

"We've got a long way to go," said Coun. Lindell Smith.

Expenses driven by growth

This is an especially tough budget year given the city's continued growth, staff said, which presents both opportunities and challenges. Halifax's population is expected to hit more than 500,000 people by the end of this year.

Mayor Mike Savage said this is a problem across Canada where cities drive growth in their provinces, but see just a fraction of the taxes residents pay while still being expected to deliver on infrastructure and key services.

In September, the province reported a surplus after getting almost $2 billion in extra revenue that they didn't expect. The finance minister said it was largely "due to a growing population."

Savage said he and other mayors are lobbying the federal government for a new fiscal framework to allow municipalities to get some of the existing tax money. He also offered to sit down with Premier Tim Houston to talk about getting "a share of that growth."

"It's amazing how many people in this country, when they move into a new house and turn the tap on they want water to come out of that tap. They expect it," Savage said.

"And they want transit, they want a place for their kids to play. And so that's going to have to be a shared responsibility going forward."

Council approved an5.9 per cent hikein 2023-24, which meant the average single-family residential tax bill went up$128 this year to a total of $2,288.