Early overview of 2027 Essex County Budget anticipates tax rate increase of 4.17%, due to financial pressures

by Sylene Argent, Local Journalism Initiative

During the October 21 meeting of the County of Essex Council, local decision-makers were provided with an early overview of 2027 Budget key financial pressures. Based on information currently available, the working draft reflects an estimated County levy environment of around $152.7M, and a projected tax rate increase of around 4.17%.

Melissa Ryan, Director of Financial Services/Treasurer, said those key financial pressures are shaping the development of the proposed 2027 Budget. 

"The 2027 Budget is being developed during a period of significant financial pressure. Over the last several months, administration has completed detailed departmental review, and senior leadership team reviews have also validated requests, identified efficiencies, reviewed revenues and recoveries, and determined which requests can reasonably be accommodated, deferred, or phased," Ryan relayed to members of County Council.

As a result, the 2027 Budget that will be presented in December will reflect administration's recommended package. Rather than presenting every request received, staff will bring forward what they believe would be a balanced and achievable budget that considers affordability, service requirements, organizational capacity, infrastructure needs, reserve sustainability, and long-term financial planning, she said.

County Council, she reminded, will be able to amend the proposed budget on December 2. Any additions, however, will require additional funding, offsetting reductions elsewhere in the budget, new revenues, or use of reserves.

One change she pointed out in the 2027 proposed budget relates to the presentation of capital funding. The capital budget is expected to show zero direct levy funding, which is different from previous years. This does not mean capital projects do not have an impact on the tax levy. Instead, levy funding is being collected through the Operating Budget, contributions to reserves, and the reserves being used to fund projects. 

"This provides a clearer picture of how funds are raised and ultimately spent," Ryan said, adding that most of the local municipalities present their Capital Budgets this way. 

Ryan added there are still several variables that are continuing to be refined before the budget is finalized, including assessment growth. As a result, the projected levy and tax rate may continue to change before the proposed budget is brought forward on December 2.

Lakeshore Mayor Tracey Bailey pointed out that a 4.17% increase to the County Budget would be significant to residents. If re-elected, it will be her objective to bring that down closer to the rate of inflation. 

She pointed out that 70% of the proposed increase is coming from wages. She asked if the County is looking at long-term strategies to address the ongoing cost, because that will continue to go up. 

In talking about the Green Bin program, Bailey noted that it has not been realized what the impact will be on residents. She wondered if there was an opportunity for County Council to look at mitigating strategies in advance, so that the 2028 Budget doesn't hold that whole impact that is going to go to residents. 

Ryan said the Senior Leadership Team does review staffing and service levels as part of the budget process. Service levels are set by County Council. It is, however, reviewed by staff during the budget process, knowing that salaries increase. It is a common practice to be reviewed to ensure it is as efficient as possible. 

In terms of the Green Bin program, Ryan responded that it was a motion of Council to look into putting it on the levy as opposed to a user fee. In 2028, that would be the potential year to do that. 2027 is the year everyone will be on, and everyone will be paying their portion until mid 2027. She said staff is looking at a strategy to implement that, as well, if that is Council’s direction at that time. 

Deputy Warden/Deputy Mayor of Tecumseh, Joe Bachetti, noted there are other local organizations that will have budget pressures, also including the Essex County Health Unit and the new conservation authority board. In terms of the merged conservation authority, he noted there is a $1M shortfall because of the merger. Those are dollars; if they can't continue those programs, they may come to the City and the County for funds. That could make it very difficult during budget time. 

County Council received the report Ryan presented.