2022 Budget Wraps Up

December 8, 2021December 8, 2021 Sunonline/Orillia City of Orillia

By John Swartz

Orillia council formalized the 2022 budget during Monday afternoon’s special council meeting. The motion they approved has a 2.94% increase to the tax levy on a budget of $65,140,755. This means property tax bills will go up approximately $41 per $100,000 of assessment.

The good news is the province is freezing re-assessments for another year, so the pressure of skyrocketing property values and the affect on assessments – which in turn affect the amount of property tax bills won’t compound the increase in the City’s budget for some people. When the province finally allows reassessments to continue and their values are updated, they won’t likely take effect until 2023; valuations from 2016 are being used in the meantime. However it’s not like people have to brace themselves for a hydrogen bomb sized increase because of the boom in housing prices, it may be more like a grenade.

Staff will look at the average increase in assessments, and adjust rates downward (or upward, but it is wholly unlikely given the market) by the same amount so things stay revenue neutral.

‘If everything went up by 15%, your tax balance without any levy increase would be about the same. Where the complication happens is if some people’s house goes up 30%, then they are paying a little bit more, but because we work on averages there’s someone else’s house that didn’t go up 15%, so their tax actually goes down,” Henry said.

“There will be big winners and big losers in that scenario and that’s just by virtue of the market and the demand for those houses.”

Councillors were generally congratulating themselves for what they think is an effective halving of the 2.94% increase because last year they set a zero percent increase by taking money from a reserve, effectively counting it as revenue, to cover the actual increase in the City’s budget.

“I think it’s very important that we all remember that this is the two year total of 2.94 (percent). Mayor Clarke you’ve reminded us of that already, but averaged over the two years we’re at about 1.47 (percent), which compares very favourably to, say, the county which is at 2% and it was 2% last time, so we’re actually under their numbers,” said Councillor Tim Lauer after the unanimous vote to approve the budget.

However that is not exactly how it plays out. Council took $603,734 from reserve, which is equal approximately to 1% of the 2021 budget and prepaid, in a sense, some of the tax bill for you. The thing is, that transfer is previously collected property tax – so you paid it anyway, just not last year.

The 2021 budget was actually 1.12% higher than 2020 on paper – you just didn’t pay the increase this year, but it stays in the budget because the City spent the money operating and operations didn’t change and they are going to spend that amount this year. The 2021 increase effectively became part of the base operating budget for 2022, which was the starting point for this year’s deliberation.

So right off the bat there was going to be at least a 1% increase in property taxes before council approved any increase or cuts to the budget.

Still, wrapping, up Mayor Steve Clarke applauded the averaging effect.

“This is really a two year process, given COVID and our desire as a council last year to reduce the pressure to whatever degree we could on our residents and our business owners and put forward a 0% increase last year. To come back with, I think, a 2.94 (percent) and as Tim said less than one and a half, or 1.47 (percent) over the last two years. I believe I’m justified in saying it’s somewhat commendable, especially in light of inflation rates south of the boarder – well over 6% and now in Canada approaching 5%. It certainly would be nice if we could put through a zero each year, but that’s also unrealistic,” Mayor Clarke said.