Newmarket will be targeting a tax rate increase below three per cent next year but is facing challenges with development charges and inflation.
Town council’s committee of the whole voted to set the target for its 2024 budget May 29, a similar maximum tax rate increase as council has had the past several years. But staff said that inflation remains a challenge, along with the uncertain impacts of the province cutting development charges.
“It will be challenging due to the following pressures,” deputy treasurer Andrea Tang told council, citing the inflation rate and asset management. “Inflation has been declining. However, April’s CPI (consumer price index) is at 4.1 per cent, still not close to the normalized historic inflation we used to see around two per cent.”
Newmarket passed a budget with a 5.5 per cent tax rate for 2023, the higher-than-usual figure blamed on inflation amidst pandemic recovery. The town is now starting its budget process again for 2024, aiming to have it completed and passed before the end of the calendar year.
Besides inflation, the provincial changes under Bill 23 remain an issue. Deputy Mayor Tom Vegh inquired about the situation, with municipalities expecting heavy revenue losses due to a reduction in development charges.
Tang responded that there is a preliminary estimated tax impact of five to 15 per cent, but they are awaiting information on how the province will fulfill its promise to keep municipalities whole.
“I’d hate to find out in October that we’re off by 15 per cent,” Vegh said.
Newmarket is one of six municipalities getting audited for the province to determine how to fund municipalities to offset Bill 23. Mayor John Taylor said that based on how long the audit is likely to take and the time needed beyond that for action, the town will likely have to complete its budget without knowing what the province will do on the issue.
“My guess is we’re going to complete this entire budget process without having clarity, but I hope not,” Taylor said.
The town is also preparing its public engagement for the budget, which will include advertisements, a budget-themed Facebook live event and an updated website. Engagement is expected to start this summer.
