Hamilton dances to Premier Ford’s tune

It will take some fancy footwork to pick up the cost of his health funding cuts

When Premier Doug Ford scratches out a cost-cutting fiddle tune, Hamiltonians have no choice but to dance to it.

The question is, will we have the legs to make it across the floor when his plan to download more public health care costs onto municipalities takes hold?

Although details are still lacking, a preliminary estimate by city staff suggests the provincial cuts will definitely leave Hamilton millions of dollars short.

That means councillors will have to either dial back public health services or cover the gap by hiking property taxes in next year’s budget.

More pressingly, they also have to figure out how to bridge the funding gap for the balance of 2019.

What short-term options are available? More on that in moment.

Right now let’s emphasize that Hamilton is singularly ill-equipped to deal with this new and unexpected financial pressure stemming from the Conservative government’s hunt for savings.

After all, as Hamilton councillors were recently reminded, residential property taxes here are already six per cent higher than in comparable municipalities while incomes in this municipality are actually 14 per cent lower.

The fact that the Ford government is slashing support for public health departments across the province by $200 million without prior consultation makes the move feel more like an ambush than studied policy.

Under current cost-sharing agreements with the province, Hamilton taxpayers now spend about $12.5 million a year to pay for such public health services as vaccinations, health and sexual education, bed bug control and restaurant inspections.

That local contribution accounts for 25 per cent of the budget. Under the shift, the city’s cost-share will rise to 30 per cent.

The timing for suddenly shouldering a bigger burden could hardly be worse.

Remember, council only recently put the 2019 budget to bed. With the deadline for the first tax bill looming, acting city manager Mike Zegarac says it simply isn’t feasible to reopen the budget to make changes.

On top of that, council just approved transferring the lion’s share of the $8.3 million year-end operating surplus to alleviate financial pressures in other needy areas.

According to Zegarac, reallocating those surplus dollars to plug the hole made by the public health cuts would only create other funding problems down the road.

That basically leaves four options for council to consider for the balance of the year.

One, the city can tap some of its discretionary reserve funds.

Two, it can reduce current public health service levels to save money.

Three, it can resort to “gaping,” a term bureaucrats use to describe slapping a hiring freeze on vacant positions and using the savings to help cover costs in other areas.

The fourth option is a hybrid of the above three.

The problem with tapping discretionary reserves is some are already all but tapped out.

For example, the city’s tax stabilization reserve — basically a go-to emergency kitty — only has about $3 million unallocated dollars left.

There are other reserves, of course. But that money tends to be earmarked for other programs and services.

Leveraging those funds means sacrificing other competing needs.

Staff will present option pro and cons to council once they have more details about the funding shift. Unfortunately, the province hasn’t indicated when that will happen.

Meanwhile, it’s fair to say that in less than a year in office, the Ford government has become a lightning rod for many criticisms and a lot of partisan fear mongering.

But even those willing to give its cost-cutting efforts the benefit of the doubt should be troubled by a download dump nobody saw coming.