The city has set its 2021 tax ratios and distributed its budget surplus to various reserves.
As noted in a staff report, “Tax ratios represent the amount of taxation borne by each property class in relation to the residential class. The ratio for the residential class is always 1.0.”
At a recent meeting, budget committee agreed to set the tax ratios as follows:
- Multi-residential: 1.378000
- New multi-residential: 1.1
- Industrial: 1.842000
- Large industrial: 1.842000
- Commercial: 1.849500
- Pipeline: 2.855968
- Landfill: 0.597728
The city also recorded a 2020 budget surplus of $5,029,505. Treasurer Lockie Davis recommended putting the surplus funds into reserves “that desperately need some funding.”
“It’s a good/news bad news story,” Davis said, noting a surplus is helpful but there are “desperate needs” in some areas.
The surplus was distributed as follows:
- $378,994 to water reserves “to retire existing internal computer lease obligations and $500,000 to a new IT capital reserve to address technology improvements”
- $1 million to the major capital facilities reserve
- $1 million to the land acquisition reserve
- $2,150,511 to remain in the tax rate stabilization reserve
Budget committee also discussed the possibility of creating a small business subclass — an option the province has made available to municipalities for 2021 that would allow for tax reductions for eligible small businesses. The province would consider matching those reductions to help businesses. However, there is some hesitancy about the new subclass.
The Municipal Finance Officers’ Association of Ontario has a number of concerns, which staff detailed in a report. The association worries about a rushed implementation and that the subclass could “potentially entrench inequities, foster animosity between businesses, residents, and municipalities.”
Coun. Ted Emond received support for an amendment to the motion that will see staff prepare a report that reviews commercial tax class options, including the potential of establishing a new smaller commercial class.
The city’s economic recovery task force, of which Emond is chair, realizes small businesses in Orillia have been “significantly impacted by the pandemic,” he said, and has been trying to find ways to support them.
“This is a possible area where we could benefit the smaller businesses,” he said.
Tax ratios have to be set before tax rates are determined. Last year, the city did not increase the tax levy, a move meant to help residents during the COVID-19 pandemic.
Mayor Steve Clarke said it is too soon to say whether council will do the same, but he noted, “to do it two years in a row would be very, very tough.”
The tax ratios and the moving of surplus funds to reserves will have to be ratified by council.
