Last year at this time, we were wondering about the effects of the incipient recession. In 2009, we found out. Next year, we have to deal with it.
At the municipal level, it's going to mean some hard decisions - perhaps not so much for 2010 budgets being worked on now, but certainly in the future. The federal and provincial governments have said stimulus funding will come to an end - and have hinted at other financing changes.
It should be hardly surprising. Both governments have run up huge deficits in pouring money into the economy through a huge list of construction and other projects. Both have said they won't raise taxes.
The only other option is cutting expenses.
It seems a strange policy to stimulate the economy one year by giving municipalities money for projects, and the next year cut back on other municipal and program funding - but that's just will likely happen.
After partnering with the federal and local government on several stimulus projects through 2009, the province announced that a reworking of population formulas meant Centre Wellington would lose almost $1.7 million in provincial funding.
That would have meant a huge tax increase, or drastic cuts in local spending that could have affected some basic programs and services. But just a few weeks before, the province was pouring hundreds of thousands of dollars into the township to help reconstruct roads and repair the Sportsplex.
It seems an incoherent strategy at best.
(Contradictions like this aren't new. In the mid-1990s, federal and provincial spending in another economic stimulus plan prompted many places to build new municipal buildings - which were then left vacant when the province forced amalgamations onto local municipalities.)
After some intense municipal lobbying, the province has decided to reverse its earlier decision and give Centre Wellington 80 percent of the operating grant. Why? No one seems to know.
Also unknown is whether the grant will continue, be reduced, or be cut completely in the future.
What is certain - even if no one has come out with specific details - is that the province will be cutting back, and that's going to have definite ramifications on local budgets.
Large tax increases are out of the question. Local councils may even find it difficult to put through the "nominal" two, three and four percent increases they've aimed at for the last few years.
Just because of the economic hardship everyone is facing, there will no doubt be calls for a zero tax increase by many local councillors at both county and township level. That comes with its own special complications, and the possibility of having to "catch up" with even larger increases in the future.
And complicating the whole picture is that 2010 is a municipal election year. In the fall campaigning, who wants to be remembered as the councillor who pushed for a "nominal" four percent tax increase over those calling for restraint? Who wants to be remembered for budget cuts that, for example, left park grass uncut, or cut back on library hours, or curtailed public skating - let alone more important services?
It's going to be an interesting year.
