Each month the Rose City Politics panel analyzes, breaks down, and critiques a local political issue that affects each and every Windsor resident.
This month, the Rose City Politics panel is considering how the City of Windsor should address the costs imposed by the COVID-19 pandemic in its 2021 budget.
The year 2020 brought with it unexpected municipal expenses and revenue shortfalls and the Rose City Politics panel breaks down the situation.
Don Merrifield Jr.: One of the rarely discussed side effects of the pandemic is the economic strain all levels of government are facing. Windsor is estimated to have an approximately $30-million shortfall for this year’s budget. Already offset by some cost savings at the city, we will still need to find about $14-million.
The obvious and short answer is to look to other levels of government to make up for the shortfalls, which will probably alleviate this year’s deficit. This will be an ongoing issue we will have to deal with for at least another year. The economy doesn’t recover instantly.
The “plus side” of budgeting is it’s all a math problem. Math problems are solvable. We will either have to make cuts to spending at the city in the short term, or raise revenue. I would suspect there will be a combination of both, as much as I prefer the cuts. Contracting out some services may be a common place to look going forward
Everyone knows housing prices have been increasing quite a bit the last few years. Although MPAC has delayed this last year’s four year reassessment of properties, that will probably happen this year. Windsor’s total assessment amount will go up quite a bit. Don’t be surprised if your new assessment is twice what it previously was. This will give municipalities the chance to play with the rates to increase revenue for the city. AKA increase property taxes. Unfortunately on a percentage basis this will probably affect lower income households, because that is where a greater percentage of the increase in property values has happened.
If all else fails, we can always take the advice a previous city councillor gave to a high tech organization when they requested some city funding: “Maybe you could ask your parents?”
Hope your parents are a lot richer than mine.
Don Merrifield Jr. is a realtor serving Windsor Essex County for over 21 year, a co-host on Rose City Politics for over 10 years, a former professional musician, father and grandfather, and a former ward 3 city council candidate.
Doug Sartori: When Council meets to deliberate over the 2021 budget later this month there is abundant reason to be preoccupied with the unforgettable year behind us and the rough road ahead in 2021.
2020 saw municipal services disrupted along with much of the local economy, and the pandemic blew a huge hole in the municipal budget. In the summer administration reported on the cost of COVID-19, projecting a $29 million impact on City coffers. Thankfully, federal and provincial funding has addressed those gaps, but the temptation to be cautious in the face of continuing uncertainty will be strong. Council should resist temptation and chart a bolder course.
When the pandemic recedes, Windsor will be left facing the challenges that now lurk below the waterline. The impact of rising housing costs is felt throughout the community, particularly by renters and low-income families. As Council recognized last January when it approved an ambitious plan to revitalize Transit Windsor, our transit system needs significant investment to meet the needs of residents.
A section of the City COVID-19 impact report makes a case against taking on debt and continuing to employ the “Pay as You Go” model for capital projects. It’s worth re-evaluating this model in light of historically low interest rates generally and interest-free loans from CMHC for affordable housing. The City’s strong fiscal position should be a means to an end, not an end in itself. Municipalities shouldn’t borrow needlessly, but there is clearly a need for affordable housing in our community that won’t be met by private-sector investment.
Budgets are about priorities. The budget is as much a statement of values as a financial document. It’s time to make a more equitable, livable city our priority instead of costly, money-losing vanity projects like Adventure Bay. Even if that means an end to “Pay as You Go.”
Doug Sartori is a political observer and organizer. When he’s not recording podcasts or getting people out to vote he runs Parallel 42 Systems, a technology consultancy in downtown Windsor.
Jon Liedtke: COVID-19 impacted lives and budgets around the world and Windsor is no exception. The city was able to reduce COVID-19 budgetary impacts by roughly $17-million through expenditure reductions and avoided costs, and while there remains about $27-million outstanding, city hall sources are confident the federal and provincial governments will make the city whole.
Going into 2021 with a minimal to non-existent deficit is a rare good news story during a pandemic; other cities don’t have this benefit. But looking at the 2021 budget, there are still $30-million of anticipated pressures, primarily from halted revenues from the casino, airport, tunnel, and Transit Windsor.
And then there are outstanding and required capital investments…
Local media reported regional municipalities will consider a $170-million rehabilitation of community housing stock, with a $36-million forgivable loan and a $54-million repayable loan funded by the Canada Mortgage and Housing Corporation at low interest rates, with $80-million outstanding to be split by the city and county per-capita.
Similarly, in order to meet the goals of the recently passed Transit Master Plan, there are required investments.
Don’t be surprised to see a council-clash over issuing debt, with one side arguing interest rates are at all time lows and now is the time to take on debt, and the other side arguing after years of ‘holding the line’, the last thing we should do is take on debt.
But as Councillor Costante – a director on the Windsor Essex Community Housing Corporation board – recently said while supporting debt financing to repair, renew and build more social and affordable housing, “the need is real and the timing is right.”
The fact is now is the time to take on debt: the money is there, interest rates are low, and it’s prudent and fiscally responsible to make these investments via debt financing; besides, it’s not like we’re talking about Christmas lights or streetcars.
Jon Liedtke is a co-host and producer of Rose City Politics, a business consultant focusing on cannabis and marketing, an occasional reporter and writer, and a member of Windsor’s The Nefidovs.
Rose City Politics broadcasts each Wednesday at 8:00pm at RoseCityPolitics.ca and is available on all your favourite podcasting apps, and appears in print monthly in Biz X Magazine.
[This article appeared first in the February 2021 issue of BizX Magazine]