Hamilton sees big drop in per-capita municipal spending: study
A new study shows Hamilton's per-person municipal spending had 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 GTHA's 26 municipalities at $3,501 per person, but that dropped by 11 per cent to $3,108 per person in 2019, according to the report by the Fraser Institute, one of Canada's top think tanks.
The data may seem hard to comprehend for Hamilton residents who watch their property taxes - already among the highest in the GTHA - continue to rise.
And it's true, the revenue collected by the city did rise over that decade, from $1.46 billion in 2009 to $1.73 billion in 2019, an increase of 18 per cent. The revenue is made up from all classes of property taxes (46 per cent of the total in 2019), transfers from other levels of government (22 per cent), user fees and charges (19 per cent), development charges (three per cent) and other revenues (10 per cent).
Yet despite the increase, spending per person didn't keep pace with inflation and population growth.
Garreth Bloor, a policy analyst at the Fraser Institute, said the study doesn't make any value judgments about the spending levels and whether they should be considered good or bad. It is dependent on many factors and totally in the eye of the beholder," said Bloor. There really isn't a yes or no."
Lower per-person spending levels could be a sign of a municipality's efficiency, but it could also mean services have been reduced. Conversely, higher per-person spending could be a sign a municipality offers more services - or is plagued with a bloated, inefficient system.
We want to present the data in such a way that a resident can say All right, I'm getting value for money,' or We need to spend more there or less there,'" said Bloor, one of the study's lead authors. Those are judgments we leave completely up to the reader."
Despite the 11 per cent drop in per-person spending, the city was still middle of the pack among the 26 GTHA municipalities. 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 constraining spending," said Mike Zegarac, Hamilton's general manger of finance and corporate services, because of challenges with respect to property taxes relative to income. The city sees huge disparities in household incomes between the inner city and the suburban communities around the periphery.
We haven't had a year-end deficit over this period of time," Zegarac said. In fact, generally speaking we've had an overall surplus and I think we've had two credit rating upgrades.
It's also important to note that constraining spending doesn't mean austerity budgets," he added. Over this time period, we haven't reduced service levels. Quite the opposite, especially around transit and paramedic services as well as some investments in long-term care."
Hamilton was one of just four municipalities to see a decline in per-person spending over the decade, along with Milton, Caledon and Toronto. Toronto was the top spending municipality in both 2009 and 2019, at $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 revenue was $3,589 per person in 2019, a slight drop from $3,632 in 2009.
Steve Buist is an investigative reporter at The Spectator. sbuist@thespec.com