Almost a year ago, as council prepares to adopt 2024 city budgetMayor Mark Sutcliffe warned the next one would be much more difficult.

Residents will soon have a clearer idea of ​​how much tougher they will be — and who will foot the bill — as city staff files its proposed 2025 budget on Wednesday.

Will the pain fall on public transport users? Or the taxpayers? Or will the city continue to hope that other levels of government will come to its aid?

Wednesday’s draft will provide best guidance to staff on how the council should evaluate these issues as it prepares for a final vote next month.

How did we get here?

The 2024 budget amounted to approximately $5.8 billion in combined operating and capital expenditures.

As always, inflationary pressures on wages, fuel and electricity will drive these costs higher. But the city also faces revenue problems. Mayor Mark Sutcliffe has complained for months about dwindling federal transfer payments, arguing that the federal government isn’t compensating the city for what it should if it had to pay property taxes.

But the toughest challenge — and the biggest unknown in Wednesday’s budget proposal — is how to fill a $120 million hole in the transit budget.

Ridership is still far below what the system needs to break even, particularly in the face of rising rail costs. Worse, most of the lost passengers were downtown commuters, who tended to buy more expensive adult passes.

The passengers who remain are usually students or seniors, who pay less.

What does this mean for property tax bills?

If this were a normal budget year without a massive transit deficit, the broad outlines of the answer to this question would already be clear. Councilors would set budget guidelines, indicating exactly what kind of tax increases they were willing to accept.

This is precisely what they did this fallsetting a target of 2.9 percent, but only for citywide and police levies.

What does this mean? Take a look at your property tax bill and you’ll notice that it’s actually made up of separate charges. One funds most municipal services, the other funds the police. A 2.9 per cent increase in these two taxes would add about $100 to the property tax bill of an average home in urban Ottawa.

But another levy funds transit, and the board has given staff only a vague idea of ​​where they want it set.

Remember that $120 million hole? If the city covered it only using the transit tax on property tax bills, it would require a 37 percent increase.

This would add about $333 more to this average property tax bill.

But that’s not going to happen, is it?

Certainly not. Council asked staff to play with about a half-dozen “levers” to close the transit deficit. The transit tax is just one of them.

Another is based on a wish: that Mayor Mark Sutcliffe Equity for Ottawa This campaign will convince the federal government and the province to find money.

The other options are less pleasant. They include fare increases, service reductions, changes to fare reductions and postponed investment projects.

Relying on tariffs alone would require a 75 percent increase. That would push the cash fare for a single ride above $6.70.

Councilors called that prospect unrealistic and unpalatable, as did the all-tax option, making it more likely that staff would come back with a combination that keeps all the levers at what the city treasurer called “a reasonable level.

What else should we pay attention to?

The city’s budget covers much more than just transit, of course, and Wednesday’s draft will reveal how staff plans to address the council’s other priorities with only the slightest financial wiggle room.

A 2.9 percent tax increase will raise only $62 million for city services, while an expanded tax base for new homes will raise about $31 million more. Staff will also look to make efficiencies, having spent about $153 million over the past two years.

But with such a slim margin and rising inflationary costs, how much will be left to fund further action on climate change or affordable housing – two priorities the council has repeatedly committed to – or to maintain infrastructure aging women that advisors have complained about on several occasions?

Although the final word will go to the council next month, Wednesday’s draft will be the first attempt at a response.