$4.6 million shortfall
City council gears up for budget talks
Gatineau’s municipal budget talks are about to begin at the council table. Some councillors have already said they will champion austerity while others will fight to maintain services. The question will be stormy as the city is again facing a deficit.
The city needs to balance its budget but even with taxes increased by 1.9%, as in 2015, it will still face a $4.6 million shortfall. The city’s fiscal situation is based on economic conditions, revenue from the property tax, and the cost of infrastructure maintenance.
Council has been told cuts are needed to balance the budget, as required by law.
The long-term plan adopted by the city in 2010 laid out financial guidelines. These include an annual tax increase linked to the cost of living, a special tax for infrastructure, and a new expenditure review and services committee.
The city has met most targets in its long-term plan. Since 2012, the city has had a 1% tax, dedicated to infrastructure. The city also topped up the life-cycle reserve for new equipment maintenance. But more revenue is needed. Councillors will discuss an income diversification plan for the city.
The city’s main source of revenue is property taxes. In 2015, this represented over 75% of the income for the $547 million budget. Without additional income, cutting expenses is mandatory. The biggest expense is the city’s payroll, which increases every year.
In 2015, the city’s salary mass, representing 47% of the budget, increased by 2.8% translating into roughly $5 million. This was a smaller increase than in previous budgets. In 2014 the payroll increased by 3.1%, in 2013 it grew by 4.1%, in 2012 it went up by 5.7% and in 2011 it rose by 4.9%.
As the city grows, and inflation rises, it is logical the city needs more staff, but the salary mass is increasing faster than Gatineau’s population. According to the Institut de la statistique du Québec, Gatineau’s population in 2011 was 268 838 and in 2014 reached 276 338 -- a 2.79% population growth. Gatineau’s payroll has increased by 20.6% since 2011.
Infrastructure expenses are also up, with record costs to maintain aging infrastructure. Transfers from higher governments have not kept up with these costs.
