Scott Radley: Your Hamilton property taxes will be going up. How much? It’s complicated.

When Hamilton councillors sit down on Thursday to dip their toes into budget discussions for the first time, it will likely mark the start of a process that is anything but comfortable.

The simple version of the story is that city staff says a four per cent property tax increase is necessary to allow the city to maintain existing services, even if it adds no extras.

But these things are never simple. This year in particular. Not when there are already rumblings next year's books could look even more rough thanks to COVID, so any expenses that get deferred to keep this budget under control could lead to a huge whack to taxpayers in 2022.

Which just happens to be an election year.

There's still so many unknowns that we have to be really concerned about where our costs are going to be and do everything we can do to control our costs," says Coun. John Paul Danko.

If the property tax increase was to come in at four per cent, it would be roughly double what we've seen in many of the past few years. That's the bad news.

The good news is that the wallet-busting scenario of a double-digit increase due to COVID-related issues that had been hanging over the city's head for months went away thanks to help from higher levels of government. So while we might end up carrying a heavier load on our backs in 2021, it's not nearly as elephantine as it might've been.

It would have been very, very dire," Mayor Fred Eisenberger says.

Of course, there's a chance that four per cent increase doesn't happen. After all, the initial projection is almost always higher than the final number. Councillors could indeed get out their scythes and bring in a final number closer to last year's 2.2 per cent.

Will they? Can they?

It's going to be more than difficult, particularly when almost half of that proposed increase is already locked in thanks to salary and benefit increases that have been negotiated and are coming due.

There are still ways to trim, of course. But unlike past years when there were obvious targets for savings, a number of councillors say those don't exist anymore.

Staff have created so many efficiencies, we don't have any more pots to pull things from," Coun. Maria Pearson says. You don't have those reserves that we used to have so you really have to be careful where you want to take from or where you can take from."

Tough as that is, it's the next part where things get incredibly dicey.

We're still in a pandemic. There's a line in the initial staff budget report that lays out the nightmare scenario councillors are staring at as a result. Essentially a repeat of the horror show they dodged this year.

Based on current information, staff is projecting additional financing pressures related to COVID-19 in 2021 between $34.8 (million) and $59.2 (million)," it says.

By law, municipalities cannot run operating deficits. So if the city incurs those kinds of losses in 2021, it would need to recoup the money through the 2022 budget. Unless, that is, senior levels of government once again ride in to the rescue. It happened once so it could happen again. The city would sure hope so. Eisenberger says those discussions are already happening. But there are no assurances.

Now imagine council decides to whittle at this year's budget numbers by putting off a few pressing projects for 12 months. Things that by 2022 absolutely have to be done. Then mix in the usual pay and benefits increases. All while having to find an additional $35 million-to-$60 million to cover the COVID-spawned deficit.

Suddenly reserves are either tapped out leaving the city in a vulnerable spot for future crises, or taxpayers are getting a wallop from city hall. In the same year those beleaguered taxpayers go to the polls to elect a new council.

There's no guarantee the worst-case scenario will arrive. As Coun. Brenda Johnson points out - presumably while crossing all her fingers and toes and touching wood - the pandemic could become less of an issue in the new year leaving the city in OK shape. Or we could get another bailout. But it's so much uncertainty. In a lot of ways, it's doing surgery in the dark.

It's not going to be smooth sailing," Danko says. But I am pretty confident in all the work that our staff have put into being financially responsible throughout the year."

No, council didn't create COVID. But my goodness, has COVID ever created a headache for it.

Scott Radley is a Hamilton-based columnist at The Spectator. Reach him via email: sradley@thespec.com