On savvy city budgeting
Towards the end of each year, your city council creates the budget for the next year. This is one of the most important things that we do, and I believe that we do so in a far more transparent and accessible way than any other government in Canada.
First, some background: the City of Calgary creates three-year business plans and budgets, but we approve our budget each year. At the beginning of the three-year cycle last year, we engaged in an unprecedented (and award-winning) citizen engagement program, and more than 23,000 Calgarians participated in helping us set priorities.
This year, we examined what had changed — did we still have faith in our economic forecasts, are we offering the right level of services at the right times, are citizens satisfied? — and then we looked at changes and adjustments that we needed to make.
The news is generally good: our forecasts have been prudent, our annual citizen survey shows incredibly high levels of satisfaction with city services, and our property taxes remain the lowest of any major city in Canada. Unlike other orders of government, we must (and do) live within our means. There is no budget deficit (and never has been).
But thanks to slightly higher than expected revenues and some efficiencies, we were able to reduce the planned tax increase slightly, while investing in important priorities for the community. These include more 911 operators, funding the new emergency opera- tions centre and expanding transit service hours.
The biggest thing we did, though, was something I am particularly happy about, and very proud that my council colleagues, especially Ald. Brian Pincott, brought this forward. For a relatively modest investment, we were able to increase access to transit for some 28,000 people, including a large number of the working poor.
The largest subsidy is for low-income seniors, who still pay $1.25 a month ($15 per year) for unlimited transit. We also increased the income threshold for this pass, so about 6,000 more seniors will be eligible in 2013.
The second-biggest subsidy is for seniors earning above the poverty line, who will be paying under $8 per month ($95 per year) for their pass. This is a big increase — $3 per month — but it allows us to continue to offer better rates for lowincome people.
Low-income people who are not seniors pay about half the regular rate for their passes — $44 per month in 2013. For a number of years, we have only been able to offer this discount to very poor people, missing out on a number of people with disability income as well as a lot of working poor people who were earning between 75 per cent and 100 per cent of the poverty line income. Council agreed that, by 2014, we should cover everyone living under the poverty line. I am convinced this was the right thing to do and that it will make a huge difference in the lives of many people.
The other big change was the assignment of $10.2 million per year to help us optimize our existing assets: we’re investing in increasing the reliability of Calgary Transit and making breakdowns less frequent, and in smart, targeted congestion solutions (think about the revised lights at Macleod Trail and Lake Fraser Gate during the morning rush hour).
We’re also creating a dedicated fund to maintain city-owned buildings. And, thanks to the leadership of Ald. Gian-Carlo Carra, we’re rebuilding sidewalks, curbs and gutters in older neighbourhoods, and no longer requiring homeowners to pay 50 per cent of the cost of these replacements.
All of this is done with a small increase to the property tax rate. In 2012, you paid $345.65 for every $100,000 your house is worth. In 2013, it will be $354.43. This remains one of the lowest property tax rates in Canada. (For interest sake, this number was $439.35 10 years ago in 2002).
It’s not all rosy, though. The city continues to rely on the regressive property tax to provide the services that Calgarians need, which is particularly unfair to seniors. As the city grows, we will find ourselves increasingly stretched.
Part of the answer to this is doing things better. There are many millions of dollars in efficiencies in the current three-year budget, and I am hopeful that our new zerobased review process will identify smarter ways of doing things.
The real answer, though, is fundamental tax reform. All five parties in the last provincial election promised this, and we have commenced conversations with the provincial government on a new city charter. This is going to take a lot of hard work on both sides, but I remain hopeful we will find a solution that will secure the future for our grandchildren and their grandchildren.
For now, though, let’s all enjoy the holiday season. From my family to yours: all the very best. Merry Christmas and Happy New Year!