Edmonton city council has voted to put the bulk of last year’s $64 million surplus into reserves. Some of it, $13.5 million worth, is being carried over for programs this year. Another $3.5 million is being put into social housing in the Cornerstones program.
But it’s what they didn’t do that goes against one concern councillors are hearing from property owners.
They didn’t use this ‘one-time’ savings to reduce the tax rate. Mayor Don Iveson is glad city council resisted the urge.
“It’s great politics, I get it. I understand exactly why they did it in Calgary, especially with some of the deeper economic challenges that they have there but it’s not good fiscal policy,” he told reporters Tuesday.
“I would say actually it’s somewhere between opportunistic and irresponsible to take one time money that you have in a surplus, pretend that it’s going to lower taxes when really all it’s doing is lowering them one year so you have to raise them the next,” Iveson continued. “That’s just pushing the burden off, past the election which I think this council has better discipline than that.”
It’s a move that chief financial officer Todd Burge warned city council about.
“You have to pay up at some point, so they’re deferring a problem to another time,” he said answering a question about Calgary’s move.
Arguing for tax relief is Coun. Mike Nickel who would like to see $8-9 million set aside to shave around .75 per cent off this year’s tax rate that will be set April 11.
“It’s a two billion dollar corporation. You say you can’t find eight million dollars? It’s stretching it a bit don’t you think?”
One and a half per cent of the taxes are spoken for, to pay for the neighborhood renewal program, and another 0.6 per cent is dedicated to paying for LRT. Nickel is fine with that 2.1 per cent, but isn’t giving up the fight. He intends on raising the question on reducing taxes at the April meeting.
“First I have to find a seconder. So I’ll go up and down the hallway and see if they’re willing to do that,” he said knowing it’ll be a tough task. “I’ve always been one of those councillors, I’m always looking for value for taxes so I’ll see if I can convince somebody. I think it is a debate worth having.”
While the 2017 tax increase is currently projected at 2.85 per cent, the 2018 hike is targeted at 5 per cent, and Burge told councillors there’s little wiggle room right now, although they’ll work at it. It too will have neighborhood renewal and LRT built in, plus a new round of contracts for city staff that the next city council will have to grapple with.
“One of the biggest challenges, to be blunt, in 2018 is going to be settlements that we have in the last year of our current collective agreements, and we’ve got to manage those costs through the 2018 budget.”
Mayor Iveson also expressed confidence next year’s rate will come down.