Calgary City Council said it needs more money from property taxes to keep city services going in the next budget due to population growth and inflation concerns.
According to the administration, the city must increase the average revenue from property taxes by 3.65 percent annually over the next four years.
On Wednesday, city councilors voted to set a cap on increases in average property tax receipts.
“If we don’t set boundaries, the world is your oyster,” Ward 1 Coun. said Sonya Sharp. “We don’t have blank checks, and neither do Calgarians; So we had to specify a ceiling, not a floor.”
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Despite the projected increase in property tax receipts, the mayor of Calgary said the budget is about the same as last year but takes into account inflation and population growth.
“Since we haven’t fully unpacked the budget yet, we recommend not increasing the budget compared to last year,” said Jyoti Gondek. “So that’s essentially what you get.”
According to the city government, Calgary CPI inflation was 8 percent in May; the highest since December 2002.
The latest information and expectations on Bank of Canada interest rate policy decisions suggest annual inflation is expected to average 5.6 percent in 2022, the administration said.
The revenue cap does not include potential budget requests from multiple boroughs, such as Calgary Transit and the Fire Department, that would come before the City Council for decision in November.
“Now is the time for management to be bold, think outside the box and innovate,” Sharp said. “If that means finding inefficiencies in the organization, take things out and put things in; The Council had to give direction today.”
How population growth and inflation will affect individual property tax bills has yet to be determined as figures presented to Council on Wednesday are expected to change before November.
Even if property tax rates fall this year, a homeowner’s bill could increase if the appraised value of their home increases, according to the city government.
“We will probably generate enough property taxes so that the part of the budget that needs to be covered by property taxes can be covered without an increase in your property tax rate,” Gondek said.
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A city-conducted poll of Calgarians, presented to the council at Wednesday’s meeting, showed that half of Calgarians support a modest increase in property taxes to keep city services running.
The same poll also found 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 it is a very difficult time,” said Gondek. “But we understand that there is inflation and population growth to consider.”
The administration is also recommending an increase in fees for waste and recycling disposal and wastewater.
Trash cart program fees are expected to increase by $0.70 per year over the next four years, which would cost homeowners $27.10 per month for blue, black, and green carts by 2026.
However, the disposal rates and fees of the municipal waste disposal companies are to remain unchanged until 2026.
The administration said fees for collecting and treating wastewater are expected to increase by 2.5 percent over the next four years.
Based on the City Council’s decision, the administration will now prepare the proposed service plan and budget for 2023-2026, which the City Council will endorse at the November deliberations.
“The City is committed to continuous improvement, including seeking efficiencies over the 2023-2026 period to help protect against future cost increases,” the City of Calgary said in a statement. “Today’s decisions by the council ensure that the city only collects as much tax as necessary.”
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https://globalnews.ca/news/8971285/calgary-city-council-caps-property-tax-revenue-increase-for-upcoming-4-year-budget/ Calgary City Council limits property tax revenue increase for upcoming 4-year budget – Calgary