Facing an economic downturn and dwindling revenues from growth, Barrie is in for what could be its toughest budget deliberations in more than a decade, says longtime Ward 1 Coun. Mike Ramsay.

Councillors received the first draft of the city’s 2008 budget last Thursday, a budget that calls for $201.7 million in spending, and a tax increase of 6.91 per cent. As well, the city’s water and sewer rates are forecast to climb 7.5 per cent and 10.5 per cent respectively – an increase that translates into $105 more for an average household.

“Most of this council has never served during a recession. By all experts’ predictions, we’re a year behind the Americans (who are experiencing an economic downturn). We need a crystal ball to see if we’ll experience what the Americans are experiencing (but) in the last recession in the 1990s, we did an active hiring freeze. I was on council. People were demanding a zero-per-cent (tax hike). There was no tolerance on the community for any tax increase. Those were very lean years,” said Ramsay.

By contrast, he noticed Barrie’s spending has been rising for several years, especially after a one-term hiatus from council. He said he was shocked to see how city staff levels have grown.

The proposed budget calls for almost 60 positions to be filled, some vacant and some new jobs, which is about a 10-per-cent increase to staffing.

“I know a lot of people are very sensitive to tax increases, especially to any of those well beyond what their pension increases would be,” said Ramsay, whose ward includes a lot of seniors on fixed incomes.

Perhaps, the city should reduce its proposed tax hike, especially in light of the higher water and sewer rates, he suggested.

“It’s a big whack in one year,” he said of the combination of the tax and utility increases – which for a typical household would mean $165.79 more in taxes, along with the $105 utilities increase.

“Maybe the tax increase has to be cut even more, to make up for the water and sewer increase. Money is money, whether it comes from the tax rate or the water rate.”

He added Barrie needs to scrupulously examine its spending, especially since tax revenue will not continue to grow simply due to growth – from the new homes to new businesses.

Evidence of this can be seen in the falling supplementary tax revenue.  Supplementary taxes – those the city didn’t budget for at the beginning of the year, but which resulted from new construction – are down to $1.8 million, from $3.3 million in 2002.

Costs, however, are on the rise. Transfers to “others” – government agencies including the County of Simcoe, the Simcoe Muskoka District Health Unit, the Barrie Police Services Board, and conservation authorities – will total $70.2 million.

The city’s capital budget totals $103.6 million, although it is partially funded by development charges.

City councillors are expected to discuss the budget April 7 and approve it April 14.