Calgarians should brace for tax hikes in 2018

‘We need to do everything we can … to make this as close to zero as we can get’

City council voted Monday in favour of having bureaucrats build a zero to two per cent property tax increase into the 2018 budget, though it will be up to the new city council to put a final stamp of approval on an exact number in November.

While administration initially recommended council green light a two per cent property tax increase — which translates to a $36 increase annually for the average homeowner — elected officials said Monday more could be done to offer taxpayers relief amid an ongoing economic downturn.

“We need to do everything we can in our power to make this as close to zero as we can get,” said Ward 14 Coun. Peter Demong.

A motion introduced by Mayor Naheed Nenshi asking city administration to prepare adjustments to the 2018 business plans and budgets based on a property tax hike of zero to a maximum of two per cent was approved in council chambers Monday afternoon in an 11-4 vote.

Councillors Ward Sutherland, Diane Colley-Urquhart, Sean Chu and Joe Magliocca voted against the recommendation, with Sutherland stating more could have been done.

“I just want a zero position, let’s make tough choices,” the Ward 1 councillor told reporters following the vote.

“We haven’t maximized our savings. When everybody says we’re down to the bone, that’s really not true.”

The two per cent tax increase was recommended by administration to help manage a $170 million budget gap council is facing for 2018. The two per cent figure is equivalent to about $32 million.

City administration will work to close the rest of the gap, through a combination of cost savings, potential one-time draws from reserve funds and more service reductions.

“A lot of people, particularly if they don’t take transit or ... they don’t go to the landfill, have not seen the impact of these service cuts. If there are more like that, we should do them,” the mayor said Monday.

The zero to two per cent hike isn’t the extent of increases homeowners across the city could face next year.

If city council decides not to return $23.7 million in annual tax room left on the table by the province back to Calgarians in 2018, homeowners will be on the hook for a 1.4 per cent tax increase come 2018.

In addition, council voted to turn this year’s 1.5 per cent tax hike into a freeze thanks to a one-time rebate from the rainy day fund, thus delaying a 1.5 per cent hike until 2018, though Nenshi said the new council could choose to continue rebating that amount until the economy improves.

Nenshi said its unlikely taxpayers will be on the hook for a 4.9 per cent increase in 2018, made up of a two per cent tax hike, a 1.5 per cent increase from the 2017 freeze and a 1.4 per cent increase from the tax room.

“I think the odds of that are very poor, but it is certainly possible,” he said.

Before the maximum two per cent tax hike was approved, a motion from Magliocca asked for administration to build a budget based on a negative two per cent tax decrease up to a zero per cent tax freeze.

Magliocca’s motion failed in a 5-10 vote.

“Calgarians have to make tough decisions, and we should too,” Magliocca said.