Raising taxes two per cent in 2017 would reduce Simcoe County’s need to borrow by $47.7 million, a county staff report says.
Examining three scenarios – freezing taxes and increases of one per cent and a two per cent – county treasurer Lealand Sibbick did not recommend one option over another. He provided only numbers for information.
Freezing taxes next year would result in a short-term debt balance of $18.1 million by the end of 2017, while a one per cent hike would reduce that to $16.7 million and a two per cent would reduce the short-term debt to $15.2 million.
Over 10 years, however, as the increase or lack thereof accumulates, the debt levels spread drastically.
Sibbick noted by 2021, a two-per cent levy hike would see the short-term debt at $45.6 million, while a freeze would see debt rise to $93.3 million.
By 2027, the numbers are even more drastic. With a two per cent increase, the county would have no short-term debt and have $151.5 million on hand at year’s end.
With a one per cent increase, the cumulative short-term debt balance would be $24.2 million and the county would end the year with $77.6 million.
But a freeze would mean the short-term debt balance wold be $47.7 million and the cash on hand at Dec. 31 would be $8.8 millon.
Springwater Township Mayor Bill French said the numbers are pretty straight forward.
“(But) I was hoping to see some work on the operating side, which stays the same at an escalating rate,” he said of the assumptions Sibbick made in his three scenarios. “Maybe staff didn’t get the right direction (from council).”
Corporate performance general manager Trevor Wilcox said staff weren’t told to look at cutting spending, only the three levy scenarios.
“We did not have direction on expenditures. It gives you an idea of what the impact, if the levy was held flat or increased one or two per cent, would be. The impact would be on cash and debt levels to accommodate the lower revenue streams.”
He noted the county has been experiencing a 1.5 per cent assessment increase, due to growth, over the past three years.
