City spending set to rise over the next four years
City spending is going to increase over the next four years, but officials say they'll keep those increases below growth and inflation.
Calgary city council heard an updated report on the city's service plans and budgets from chief financial officer Carla Male and city manager David Duckworth on Wednesday, as councillors work toward the new four-year budgeting process in November.
The city is projecting spending will grow from an estimated $4.192 billion this year to $4.863 billion by 2026. It means the city will need to find, on average, an additional $168 million each year for the next four years.
Earlier this year, council directed administration to keep budget increases tied to population growth plus inflation, and on Wednesday administration told council it is doing just that.
The report showed the city is not planning any service cuts, but cautioned that many city services receive budget increases that are below inflation plus population growth.
“With household expenditures increasing an average of 7.4 per cent in Alberta this year, we are working hard to maintain affordability by keeping the projected increase in city expenditures as low as possible,” said Duckworth.
Planned capital spending is expected to be $4.4 billion over those four years, including projects such as four new fire stations, electrification of select city buses and vehicles, and an affordable housing project in Bridgeland.
Coun. Dan Mclean asked the question on the minds of many property owners.
“What would be the projected cost to the average homeowner if these numbers are accepted?”
Male told Mclean that the number for any individual homeowner is difficult to pin down without knowing their assessment. She said to stay within population growth and inflation, the average increase is about 3.7 per cent, but there are other factors.
“Until we have an approved budget and a finalized assessment roll on an individual basis, it's very difficult (to tell),” said Male.
One budget document indicated that after accounting for expected new revenue from growth and redevelopment, the city will still need to take in 4.4 per cent more in property tax next year. That number drops to 3.3 per cent in 2024, followed by 3.7 per cent in 2025 and 3.2 per cent in 2026.
Mayor Jyoti Gondek said rising home prices means the city may be able to take a smaller slice of the pie from each homeowner in taxes.
“Indications are that the market is strong and assessed, property values have gone up, which means if we left our mill rate the same, we would collect more than we needed,” said the mayor. “So we might be able to adjust our mill rate down, still have enough to pay for inflation and population growth, and keep service levels steady.”
Even with a declining mill rate, those who have significant increases in assessed property value could see the amount on their tax bill go up over last year. If the mill rate declines, only those who saw a decrease in property value would pay less overall.
“It's still possible that the property taxes you have to pay will go up because the value of your home is more, but from what we can control in terms of the rate that we set, our indication is that we can probably bring that (mill rate) down,” said Gondek.
Council still has to deliberate and finalize the budget plan between now and November. The city is asking for public input on its budget plans at engage.calgary.ca.
Members of the public are invited to go to calgary.ca/yourservices for more information on the budget and how to provide feedback.