Calgary’s city administration said it needs more property tax money to maintain city services in the next budget due to concerns about population growth and inflation.
The city needs average property tax revenue to grow 3.65 percent annually over the next four years, according to the administration.
On Wednesday, councilmembers voted to cap the increase in average property tax revenue.
“If we don’t set limits, the world is your oyster”, Ward 1 Coun. Sonya Sharp said. “We don’t have blank checks, and neither do Calgarians; so we needed to establish a ceiling, not a floor.”
Read more:
City Council Greenlights Climate Strategy to Bring Calgary to Net Zero by 2050
Despite the projected increase in property tax revenue, Calgary’s mayor said the budget is on par with last year’s, but inflation and population growth were factored in.
“Since we haven’t had a full budget analysis, what we recommend is that we don’t increase the budget from last year,” said Jyoti Gondek. “So that’s essentially what you get.”
According to the city administration, Calgary’s consumer price index inflation was 8 percent in May; the highest since December 2002.
The latest information and expectations about the Bank of Canada’s rate policy decisions indicate that annual inflation is expected to average 5.6 percent in 2022, the administration said.
The revenue cap does not include potential budget requests from various city departments, such as Calgary Transit and the fire department, which would go before the city council for a decision in November.
“Now is the time for the administration to be bold, to think outside the box, to be innovative,” Sharp said. “If that means you have to find inefficiencies in the organization, take things out and put things in; the council needed to set a direction today.”
How population growth and inflation will affect individual property tax bills is yet to be determined, as figures presented to the council on Wednesday are expected to change before November.
According to the city administration, even if property tax rates decrease this year, a homeowner’s bill could rise if their home’s assessed value increases.
“We will probably generate enough property taxes so that the portion of the budget that needs to be covered by property taxes can be covered without an increase in the property tax rate,” Gondek said.
Read more:
Committee recommends council approve 5 new communities outside of Calgary
A survey of Calgarians conducted by the city, presented to the council as part of Wednesday’s meeting, showed that half of Calgarians support a small property tax increase to maintain city services.
That same survey also showed that about 53 percent of Calgarians feel they are getting “good” value for their tax dollars, while just under half of those surveyed said they trust the city of Calgary. .
“We understand that this is a very difficult time,” Gondek said. “But we understand that you have to take into account inflation and population growth.”
The administration is also recommending increased rates for waste and recycling and sewage disposal.
The dumpster program fees are expected to increase by $0.70 per year over the next four years, which would cost homeowners $27.10 per month by 2026 for blue, black, and green dumpsters.
However, rates and disposal charges at the city’s waste management facilities are expected to remain the same until 2026.
The administration said sewage collection and treatment fees are expected to see a 2.5 percent annual increase over the next four years.
Per the city council’s decision, the administration will now develop the proposed 2023-2026 service plan and budget, which the city council will help develop during deliberations in November.
“The City is committed to continuous improvement, including finding efficiencies during the 2023-2026 period to help protect against future cost increases,” a statement from the City of Calgary said. “Today’s council decisions ensure the city collects only the amount of taxes necessary.”
© 2022 Global News, a division of Corus Entertainment Inc.