Thames Centre Council was recently blindsided by an unprecedented $138,000 cost increase to their 2014 budget. This increase puts greater fiscal pressure on a Council that already is wrestling with reduced transfer payments from the heavily indebted provincial government.
The $138,000 increase comes from a deal between the provincial government and Ontario Provincial Police Association. The deal guarantees that OPP officers will be the highest paid officers in Ontario. This stipulation has resulted in a 12.4 per cent across-the-board wage increase that took effect on Jan. 1. Small municipalities that utilize OPP services have no say in the collective bargaining process but must pay this increased rate anyway.
Given this added cost pressure, Thames Centre will have to explore innovative budget measures in order to avoid raising taxes.
Fortunately, there are examples of municipalities successfully meeting the challenging fiscal reality. A Thames Centre councillor has acknowledged the success of Windsor Mayor Eddie Francis who, despite having Ontario’s highest unemployment rate and next to no revenue growth, has overseen six consecutive zero-tax-increase budgets.
What’s the key to Francis’s success? He took one of the biggest budget items — police costs — and reduced it by hiring non-unionized, auxiliary police on an hourly basis. He has also privatized other services and reduced the size the city’s workforce.
Thames Centre faces fiscal challenges that are shared by many municipalities across the province. According to the National Post, Ontario has become the second-most indebted subnational government in the Western Hemisphere next to Quebec. Consequently, municipalities can expect to receive less money from the province for the foreseeable future.
Innovation and prudence, like that demonstrated by Windsor, will be key to avoiding major tax increases and the loss of key services.