Hamilton sees sharp drop in municipal spending per capita: study
A new study shows that Hamilton’s municipal spending per capita has seen the largest decline of any municipality in the Greater Toronto Hamilton Area over a 10-year period.
Hamilton had the second highest amount of spending in 2009 of the 26 municipalities in the GTHA at $3,501 per person, but that fell 11% to $3,108 per person in 2019, according to the Fraser Institute report, the one of the best think tanks in Canada. .
The data may seem difficult to understand for Hamilton residents who are seeing their property taxes – already among the highest in the GTHA – continue to rise.
And it’s true, revenue collected by the city has increased over this decade, from $1.46 billion in 2009 to $1.73 billion in 2019, an increase of 18%. Revenue is made up of all categories of property taxes (46% of the total in 2019), transfers from other levels of government (22%), user fees and charges (19%), development charges (3%) and other income (10 percent).
Yet despite this increase, spending per person has not kept pace with inflation and population growth.
Garreth Bloor, a policy analyst at the Fraser Institute, said the study makes no value judgments about spending levels and whether they should be seen as good or bad. “It depends on many factors and totally in the eye of the beholder,” Bloor said. “There really is no yes or no.”
Lower per capita spending levels could be a sign of a municipality’s efficiency, but it could also mean that services have been reduced. Conversely, higher spending per person could be a sign that a municipality is providing more services – or struggling with a bloated and inefficient system.
“We want to present the data in a way that a resident can say, ‘Okay, I get what I pay for’ or ‘We need to spend more there or less there,'” said Bloor, l one of the study’s researchers. main authors. “These are judgments that we leave entirely to the reader.”
Despite the 11% drop in per capita spending, the city still ranked in the middle of the pack among the 26 municipalities in the GTHA. Hamilton had the second-highest level of spending per person in 2009, but dropped to 12th place a decade later, slightly below the GTHA average of $3,203 per person.
City council has been “very focused on spending restraint,” said Mike Zegarac, Hamilton’s general manager of finance and business services, due to property tax-vs-income challenges. The city experiences huge disparities in household incomes between the downtown core and suburban communities on the outskirts.
“We didn’t have a year-end deficit over this period,” Zegarac said. “Actually, generally speaking, we’ve had an overall surplus and I think we’ve had two credit rating upgrades.
“It is also important to note that limiting spending does not mean austerity budgets,” he added. “During this period, we have not reduced service levels. Quite the contrary, particularly around public transport and paramedical services as well as certain investments in long-term care.
Hamilton was one of four municipalities to see declining per capita spending over the decade, along with Milton, Caledon and Toronto. Toronto was the highest spending municipality in 2009 and 2019, with $4,641 and $4,605 per person respectively. Milton had the lowest spending per person at $2,629 in 2019.
On the revenue side, King Township in York Region collected the highest amount of revenue per person in 2019 at $5,935, while Halton Hills collected the lowest at $2,794 per person.
Hamilton’s income was $3,589 per person in 2019, down slightly from $3,632 in 2009.