Residential property taxes are set to increase 5.5 per cent in each of the next two years in Innisfil, despite a last-ditch effort by some councillors to send the draft 2025-2026 budget back to staff.
Council debated the budget at its Jan. 15 meeting in the second attempt to move it forward.
In December, staff were told to crunch the numbers again and utilize reserves, such as the tax rate stabilization fund, to soften the 8.05 per cent increase proposed for 2025 and the 7.16 per cent increase planned for 2026.
An even 5.5 per cent each year amounts to an extra $276.88 and $292.29, respectively, for the average homeowner in Innisfil.
Coun. Fred Drodge wasn’t impressed.
“I was very clear that I wanted (the property tax stabilization reserve) to be brought down to somewhere around $2 million and no less,” Drodge said. “Is there a reason why we could not proceed and bring that account down to a minimum balance of $2 million for 2025 and 2026?”
Drodge’s motion was one of two passed by councillors in December to try and lower the tax rate for residents. The other, put forward by Coun. Jennifer Richardson, gave staff the 5.5 per cent figure to strive for.
During that meeting, Drodge said he wanted the number to be lower and was quick to support the motion put on the floor by Coun. Linda Zanella during the Jan. 15 meeting, which called on staff to take the budget back and “exhaust every possible avenue” to get the tax rate down to four per cent.
Staff defended the budget they had brought back to council.
“We took the direction; we listened to what council was saying during the budget deliberations,” said chief financial officer Mike Melinyshyn. “We heard from council that they wanted to use reserves … We felt it prudent to keep the reserves where the policy was.”
Town policy calls for the property tax rate stabilization reserve to have a minimum balance equal to five per cent of budgeted expenditures, net of transfers to other reserves. To keep to that standard, staff pulled from other reserves, such as the alternate revenue source reserve fund, to lower the impact on the residents in 2025 and 2026.
At the start of 2025, the property tax stabilization reserve has a balance of nearly $5.5 million. The proposed budget calls for $2 million to be used in 2025 and anticipates $400,000 being returned to it this year and next, reaching nearly $4.3 million by the end of 2026, about $275,000 above the five-per-cent threshold.
The greater impact will be seen in the balance sheet for the alternative revenue source fund, which is supplied by the dividend the town receives from the Ontario Lottery and Gaming Corporation for being the host municipality of Georgian Downs. Currently sitting at about $36 million, that reserve will shrink to $23 million by the end of 2026.
On top of already planned expenses — and another nearly $16 million in revenue and interest collected — almost $4.4 million will be used to finance the town’s operating budget in 2025 and 2026.
That’s money that will need to be found in two years’ time, staff warned in its report to council. Coun. Alex Waters often repeated that council was “kicking the can down the road” in this meeting, as he had in December, which Melinyshyn said staff had been trying to stress to councillors as well.
“We’re not reducing expenses; we are … changing the source of the funding,” he said.
Waters drew from experience in the previous term to warn his colleagues about what likely lies ahead.
“For those of us who may still be around next council, that’s something we’re going to have to deal with and then we’re going to be putting the same question to staff again when they come back to us with another 7.5-per-cent increase because we refuse to deal with it,” Waters said. “I just think we’re doing the next council a disservice, and we’re doing taxpayers a disservice if we do that.”
Deputy Mayor Kenneth Fowler recalled the zero-per-cent increase the town introduced as a way to support residents during the COVID-19 pandemic. While many on council applauded it, particularly those newly elected, veteran Coun. Bill Van Berkel warned his colleagues: “This would come back to bite us hard.”
Van Berkel was right, Fowler said, recalling the “flood of complaints” that followed as services needed to be cut.
Coun. Kevin Eisses warned that was in the future for the town in this budget cycle if any further cost savings for the residents were to be found. He told his colleagues they need “to be wary of taking the easy way out.”
“We spent two days of meetings after weeks of going through the budget to suggest to staff where we could cut services, and for the most part, I couldn’t see where there was a spot where significant cost could be cut without residents not agreeing with that,” he said. “So, for us to ask staff to go lower than we are now, the only way I think makes sense is to go after service levels. We didn’t do that as of right now, and I’m not prepared to do that myself.”
Many around the table were equally hesitant. Coun. Grace Constantine said her colleagues need to be realistic in the desire to lower taxes.
“I could be wrong about this, but I don’t think the residents of Innisfil mind paying for good services,” she said. “So, we have to be realistic, because I don’t think any resident wants us to cut their services right now.”
Zanella clarified her intent wasn’t to start cutting services, as Coun. Robert Saunders saw the motion as a waste of staff’s time if further reductions to the tax rate could only be achieved by eliminating positions or programs.
“I’m hoping we might be able to find some funds somewhere else without affecting service levels,” Zanella said. “At least try. If we try and we fail, at least we tried. I would like to exhaust every possibility and see if there is anywhere we can set some funds that can help bring down the tax levy.”
That refinement could still happen, town chief administrative officer Oliver Jerschow told councillors, however “there are no easy options left.”
“This has never been easy, but now it’s really not easy,” he said. “Raiding the piggy bank sometimes seems like an easy option … but there are consequences of that, whether today or further down the road.”
Zanella’s motion — eventually amended to include other options between the current 5.5-per-cent increase and the initial four per cent proposed – was defeated 6-3 in a recorded vote.
In voting to move the budget forward with the 5.5-per-cent tax increases, council also opted to remove the new Innisfil Heights fire station from the capital budget at this time.
The statutory 30-day amendment window for the budget was also shortened by council direction to end Jan. 29, at which time the budget will be enacted.
