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Budget 2007 - Questions & Answers

The following are some answers to some questions you might have about the Town’s 2007 budget:

Q. Why are we facing a 5.9% tax increase?
A. Richmond Hill is committed to continuing to provide excellent services to its residents and businesses. Having a higher inflation rate than that of the average homeowner, puts a significant burden on the municipality as the Town purchases many products and services that have experienced significant cost increases. For example, the Town heats and lights thousands of square feet in its many facilities, including community centres, pools and libraries, to name a few. The municipality also uses thousands of litres of fuel in its operations.

Richmond Hill has been a rapidly growing community that is beginning the transition to a more mature phase. Town faces a challenge in that it must make investments now in order to pay for repair and replacement of its $2 billion inventory of assets (roads, libraries, community centres, pools, parks, arenas).

While some municipalities have reduced services, deferred capital investment, or incurred debt, the Town is committed to maintaining the required investments to keep our facilities in good condition. With a prudent long term view, the Town can forecast our future needs and prepare now.

Q. What is the Town doing to raise additional revenues or reduce expenses?
A. The Town is committed to continue to deliver excellent services to residents at the lowest possible costs. Council and staff continue to monitor fee schedules to ensure that appropriate and fair user fees and charges are applied to all services. Projects are also currently underway aimed at ensuring that the Town is operating as efficiently as possible to minimize tax costs.

Q. Didn’t the Federal government recently announce changes that will give municipalities more opportunities to receive and raise funds?
A. It is true that municipalities have realized some of the tax revenue that is collected when you pay for gas at the pumps. This item is still being phased in and there are stipulations on what the monies can be used for. The Town will receive $10 million over five years to fund environmentally sustainable infrastructure projects, including renewal and replacement of existing assets. These initiatives have been helpful, yet the Town faces the costs of maintaining, repairing and replacing nearly $2 billion of depreciating assets. Council is committed to creating a legacy whereby these assets are maintained effectively, without the need for costly debt. To do this requires careful financial planning, and additional financial commitments by the Town. In addition to this, the Town recently dedicated staff resources to pursue special funding opportunities, sponsorships and grants that would help offset project and operating costs for specific initiatives.
As well, the Town has been working hard along with other GTA municipalities to press the Federal and Provincial governments to assist us in solving municipal funding issues, particularly around infrastructure maintenance, and also to reduce the burden of social services costs from the property tax bill. Announcements in the past few months will provide us with some assistance as the initial five year gas tax sharing program is expected to be renewed. This could add $10 to $12 million of available funds for the Town’s infrastructure.

Q Why are our residential taxes higher than those in Toronto?
A. It is important to note that independent studies do show that Richmond Hill’s property taxes are comparable to taxes of similar homes located in parts of Toronto. Comparing property tax rates is not a simple task. In fact it’s not a simple exercise in comparing “apples to apples” either. The City of Toronto provides services to its communities which are similar to that of the Town and Region combined. Also, the costs for providing such services differs between municipalities. 

Also, Toronto businesses share a larger share of taxes than the residential owners, as they are taxed at much higher commercial property tax rates than in York Region and other surrounding areas. In Toronto, businesses pay tax rates which are 3.7 to 4.2 times higher than the residential tax rates, while in Richmond Hill, businesses pay tax rates only 1.2 to 1.4 times higher than the residential rates. The drawback of this approach is that Toronto is seeing the loss of many major employers, as they move from Toronto into the surrounding municipalities where the taxes are lower, and the employees live closer to them. 

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