Downtown tax gap needs fix, Nenshi says
The city needs a more permanent solution to the tax shift caused by depressed property values downtown, Mayor Naheed Nenshi said at a city budget meeting Thursday.
Over the past two years, the city has spent nearly $100 million to stave off massive tax increases to suburban businesses caused by the decline in tax assessments from the city ’s downtown office towers.
Council had hoped the one-time payments would end as the economy recovered, but with the downtown vacancy rate continuing to hover around 25 per cent, the city says a more permanent solution is required.
“The hope was that it would be better. It’s not better,” Nenshi said Thursday. “We really have to think about how we can do a more systemic solution here.”
Nenshi made the comments during a special council meeting held Thursday to discuss the next fouryear budget.
The mayor said there area number of options for tackling the con- tinued tax assessment gap that will be presented at the next meeting of council’s priorities and finance committee on Oct. 30.
“Should we shift some of the tax burden from businesses to homeowners? Should we phase in tax increases for the businesses while we’re still filling the downtown? These are all questions that are hard but that we have to have.”
Thursday’s meeting also saw a clearer picture emerge of the city’s four-year capital spending plans.
The city is looking to spend at least $4.8 billion on capital projects between 2019 and 2022, according to revised numbers presented Thursday.
Only about $2.3 billion is considered a new budget request. The remainder is for previously approved, continuing projects such as upgrades to Crowchild Trail and the Bonnybrook wastewater station. About $447 million has been set aside for the construction of more than a dozen new suburban communities.
City administration warned Thursday that the overall capital budget figure will creep higher as municipal costs associated with the Green Line transit project are added. The final figures are expected to come when the budget is released Nov. 14.
A wild card heading into the November budget debates will be whether council commits to one or more new megaprojects.
Councillors spent the majority of Thursday ’s meeting holed up in a closed session discussing some of the city’s unfunded investments.
“There are a number of other projects that we’ve been talking about, ranging from the Olympics to an events centre, to a convention centre expansion at the BMO Centre — none of which are currently funded,” Nenshi said during an afternoon break. “So it’s important for council to see if you want to add these things on to that ($4.8 billion) that’s already being spent, what are the various permutations of what that might look like.”
Nenshi said while funding discussions are ongoing, it’s likely still too early for the city say which ones will go forward.