Last year, when city councillors approved the 2024 city budget with a 7 percent tax hike, they called the spending plan a "course correction." Mayor Jeff Leal said that additional investments were needed in the short-term to ensure that Peterborough residents didn't face double-digit tax increases down the road.
Now, a year later, city councillors are debating the 2025 budget and citizens are once again facing a big tax hike. After two days of council deliberations, the proposed tax increase is currently sitting at about 8 percent, and that number doesn't include an expected boost for police spending that could drive the tax increase closer to 9 percent.
If last year's budget was the course correction, why are we correcting course again? That's one of the many questions we dive into in our latest podcast: A Guide to Peterborough's 2025 Budget.
One explanation we offer is that even though 2024's tax increase was higher than usual, the city kept it artificially low by using reserve funds to cover some recurring expenses — expenses that we have to use taxes to pay for in 2025.
That accounts for a significant portion of this year's big tax increase, but not all of it. There's also inflation, negotiated wage increases, and the need to increase spending on capital projects to address Peterborough's growing infrastructure backlog.
Councillors spent two days debating the budget in November and trying to reduce the tax increase. But they mostly concerned themselves with cutbacks that many have called "low-hanging fruit" — cuts that are easy to make, but don't deliver significant cost savings.
Here's an example: cutting lifeguard service at Rogers Cove next year, which councillors voted to do, will save the median property owner a mere $0.90. Meanwhile, completely defunding the Electric City Culture Council, which councillors also voted to do, will save that same property owner about $4.
Then there are the cuts councillors didn't make, because citizens showed up to say they valued the services they get in return for their tax dollars. By voting to restore grant funding for community non-profits to 2024 levels, councillors added about $7 back onto the median property's tax bill next year.
Regardless of whether citizens agree or disagree with any of the proposed spending cuts, I think most would agree that shaving a dollar or two off a tax bill that already runs to several thousand is negligible.
There are two words that get thrown around in these debates as if they are equivalent: "cuts" and "efficiencies." Cuts save citizens money by taking a service away from them. But efficiencies deliver cheaper ways of providing the same level of service.
So ... can the city find substantial efficiencies to drive property taxes down without cutting services? Maybe. But there weren't many ideas for how to do that offered in the 2025 draft budget.
On the other hand, maybe it just costs a lot of money to build the kind of city people want to live in — one where it's easy and safe to get around and citizens can flourish.
If that's the case, perhaps it's time to start exploring new ways of raising revenue for cities, ways that don't require property tax hikes year after year. On the podcast, Brett and I explore a couple of options. (Spoiler: None of them will be quick and easy to implement.)
In addition, Brett and I also discuss these topics on the podcast:
Proposed cuts to discretionary benefits for social assistance recipients
What transit might look like in 2025
How our city's infrastructure backlog could lead to higher taxes in future years
The $2 million increase to Peterborough's homelessness spending
You can listen to our podcast on our website, or you can find it in most podcast apps.
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