An ongoing pandemic means it’s time to take out the hatchet at municipal finance departments. This week all three North Shore municipalities moved forward on revised budgets, which cut spending and most optional programs from their budgets. Discussions about what optional might mean were revealing. Is a new fire truck optional? Is fixing the roads?
Municipalities are expecting a significant revenue crash compared to pre-COVID times. Facility rentals, recreation programs and permits that bring in money are either halted or slowed to a crawl. How many homeowners will be able to pay their property taxes on time is another open question that won’t be answered until July.
Expect cash flow to be eyed nervously over the summer.
Municipal austerity measures are likely to highlight downloading by senior governments over the past decade. Up to now, local governments have been forced to take on many social issues not strictly in their ballpark. But now they can’t afford to.
Instead municipalities are figuring out how to keep basic services like water and garbage collection running.
Those hoping the province will step in and save the day are likely to be disappointed. So far the province’s response has been to tell local governments to go and take out loans.
Perhaps that’s not surprising considering the province’s own financial position. Currently it’s still forking out for the two biggest expenses – health care and education – while the economy that generates revenue has ground to a halt.
The dilemmas faced by town halls are just one example of financial storm clouds.
Here’s hoping we can all hang on and wait out the squall until it passes.
Strange times indeed.
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