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Tax hikes are likely to be announced Wednesday to make up shortfall


jesseps
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MONTREAL – It isn't as if we weren't warned.

 

When Montreal Mayor Gérald Tremblay unveils the city's $4.3-billion budget for 2010 on Wednesday, he will be detailing the height, weight and ugliness of the fiscal gorilla he and his councillors have been alluding to for much of the last year.

 

Rumours last week that the city will put the arm on Montreal taxpayers for a total of six per cent more than last year dovetail nicely with city hall's admission last spring that the global recession caused $155 million in investment and interest revenue from city accounts to evaporate.

 

That shortfall, coupled with a $40-million deficit run up by the Société de transport de Montréal, leaves city planners remarkably little in the way of wiggle room or budgetary creativity, even though they've tried to stop the gap by ordering city boroughs to trim their budgets.

 

But the challenge for Tremblay, as well as Alan DeSousa, the newly minted executive committee member in charge of finances, isn't just steering the budget through a city council that is now home to two opposition parties and past 15 increasingly cranky suburban mayors. The challenge will be to keep this budget from becoming yet another link in a chain of controversies that has hobbled Tremblay's administration since May.

 

Ever since the water meter fiasco (where a $355-million contract was awarded, vigorously defended, then just as diligently suspended and cancelled as provincial police investigate how it was handed out), public and political scrutiny over the manner in which Montreal spends your money has been laser-like.

 

It matters little that many if not most of the province's municipalities are in the same boat as Montreal, their revenues battered by the recession, and the only way to make ends meet being to squeeze a bit more from their main source of cash: property taxes.

 

Even before the Nov. 1 municipal election, it was clear that a tax hike was in the cards. Internal documents from Montreal's finance department leaked to the media suggested taxes might have to be increased 16 per cent over four years simply to plug the about-$200 million budgetary hole.

 

Rather than deny that taxes would be increased, Tremblay actually confirmed that some kind of a hike was necessary, the only question being by how much.

 

But even though the mayor began his third term by asking the opposition parties at city hall - which between them hold 26 of 64 seats - to abandon partisanship and work together for the good of the city, it's unlikely Projet Montréal or Vision Montreal will give Tremblay the benefit of the doubt when it comes to balancing the books for 2010.

 

Contract scandals, perceived or real, or ideological differences may not resonate with all voters. But everybody understands a tax increase.

 

Back in May, when Tremblay challenged an audience at a Board of Trade luncheon to speak up about projects they believed in, he was trying shift the spotlight away from a vocal minority of special-interest groups.

 

But this Wednesday - eight months, one recession, one election and several scandals after that speech was delivered - will find the special-interest groups more vocal than ever. And given the fact one of those groups will be Montreal taxpayers fed up with paying more to maintain the status quo, they may no longer be in the minority.

 

(Courtesy of The Montreal Gazette)

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