The city of Lévis expects a $7.8 million deficit by the end of 2023, which it will have to make up by drawing on its surplus to balance its budget. This sets the stage for major tax increases in 2024.
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The presentation of the treasurer’s September 30 income and expenditure forecast report to the council on Monday suggests there is a hole in the council’s finances at the end of the current year.
According to research by the opposition group Repensons Lévis, this would be a first for the municipality since the mergers in the early 2000s.
The expected deficit results from less generous revenue than expected and higher spending.
Inflation highlighted
Inflation has been hit hard, explained Mayor Gilles Lehouillier. “We are experiencing a decline in the development of rural income. […] We expect half of last year’s amount.”
The expected deficit is 2.2% of the city’s budget, or $358.8 million, said the city’s general manager, Stéphane Lafaut.
According to the law that applies to them, municipalities are not allowed to have an operating deficit. So Lévis has to clean up. And if revenues have not increased by then, part of the accumulated surplus of $21 million will be used for this purpose, said Mayor Gilles Lehouillier and his finance committee chair, Isabelle Demers, who downplayed the problem.
“It is minimal compared to the situation we are currently experiencing,” said the mayor, who judges that “it is anything but catastrophic.” He also assumes that other cities will experience a similar situation.
Difficult decisions regarding taxes
Regarding taxes, Gilles Lehouillier points out that difficult decisions lie ahead in this context in order to avoid cutting services to citizens. Quebec Mayor Bruno Marchand recently suggested that any increase of less than 5.5% would be a “gift” to the citizens of his city.
Mayor Lehouillier agrees without commenting on the upcoming percentage increase. “We are exposed to these dangers. Yes, it will be a little more difficult because ultimately we have a choice: cuts in services to keep inflation down?”
The opposition demands better management
Disappointed and concerned about these findings, the opposition is calling for “better management of the city’s finances.”
“We demand stricter financial management for the city. Policymakers lack financial vision and incomes are not sufficiently diversified, which we have emphasized on several occasions,” affirm the two elected officials of Repensons Lévis, Serge Bonin and Alexandre Fallu.
They now fear a possible sharp increase in local taxes. “Lévisiens deserve complete transparency on this crucial issue.”
Quote
“If you decide to underperform inflation [pour la hausse de taxes], it doesn’t work without cutting services. This is the decision our Finance Committee is currently considering. We have to reckon with this inflation.”
– Gilles Lehouillier, Mayor of Lévis
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