The City of Calgary’s four-year budget adjustment is expected to increase overall property taxes by 5.7 per cent this year, but if City Council makes important decisions about the city’s tax burden, it could mean more for homeowners. could be raised to a maximum of nearly 8%.
The budget adjustments were made public for the first time on Tuesday, when they were submitted to the City Council ahead of debate later this month.
Property tax increases will also still depend on City Council decisions on recommended spending increases to meet the demands of a growing city, as well as the distribution of taxes between households and businesses.
“Council and administration worked together last year to consider the priorities of Calgary residents and figure out how we can meet their expectations,” said Mayor Jyoti Gondek. “Specifically, how can we provide better solutions when it comes to housing, public transportation, road safety, and the many amenities that people want in their cities.”
City officials said if all the measures included in the administration’s recommendations are approved, the tax increase would be less than inflation plus population growth.
tax shift proposal
City officials are recommending shifting the tax burden to businesses and homeowners by 1% each year over the next three years.
Currently, residential properties pay 52 per cent of property taxes in Calgary, with businesses paying the remaining 48 per cent.
However, city officials note that for every dollar of assessed value, nonresidential property owners pay 4.26 times more city property taxes than residential property owners. If the tax burden rate remains as it is, this figure is expected to rise to 4.59.
“We’re hearing from them that they need help,” City of Calgary Chief Administrative Officer David Duckworth told reporters. “They need support to stay competitive to ensure we have a thriving business economy here in Calgary.”
If that number rises to an even 5:1, city officials have warned that this is the legal limit and the state government will intervene.
“When it’s our fiscal responsibility to take care of Calgary residents, we’re not interested in interference from other government agencies,” Gondek said. “I hope council members understand their responsibility and vote accordingly.”
If the tax rate changes by 1% and the City Council approves the budget adjustments as recommended, the average homeowner’s property taxes would increase by 7.8% this year. For a home with a median price of $610,000, that’s an average increase of $16 per month.
For a business valued at approximately $5.2 million, the increase in property taxes would be only 3.5%, an average increase of $277 per month.
District 1 Sonya Sharp told reporters she would vote against the proposed motion due to concerns about its impact on the housing property tax bill.
“When we talk about an increase of $16 a month, that’s the equivalent of lunch, coffee or food for kids. So there’s going to be some difficult conversations over the next two weeks,” Sharp said.
Sharp said he would prefer a 3.4% tax increase in 2024, which was proposed for next year when the four-year budget was approved last November.
“If you look at the surplus and all the reserves, if you can’t invest in the city while staying at the 3.4% line, you’re doing something wrong,” she added.
However, District 8 Courtney Wolcott said she expected to see even higher numbers given the different demands and pressures on municipalities across the country.
“Given the inflationary pressures and everything we’ve seen so far, I honestly expected things to get much worse,” Walcott told reporters. “For me, it’s a certain sense of security.”
The City Council voted against changing the tax allocation at a meeting earlier this year.
spending suggestions
City officials also announced that this budget includes new spending to build more affordable housing, implement Calgary’s housing strategy, improve traffic and community safety, and improve the city’s corridor and road infrastructure. Recommends Congress to approve a list of investment items in the adjustment. .
City officials said the proposed spending would be covered by surplus funds, reserves and tax revenue.
The City of Calgary is projecting a $100 million surplus in 2023, with an additional $165 million in off-budget revenue from local access fees.
These investments will require an increase of $96.5 million in ongoing operating funds and $68 million in one-time funding in 2024.
The four-year budget adjustment also includes $426 million in new capital expenditures.
Implementing the city’s housing strategy will cost $27 million in operating funds and $54.5 million in one-time costs next year, according to the budget. Approximately $90 million in capital funding is also recommended to improve access to affordable housing.
Investments in affordable housing represent a 426% increase over existing budgets and are expected to spur the development of an estimated 1,000 units of market housing above normal annual construction, and at least 3,000 units of non-market housing annually. This is the goal.
“I think the fact is that now that the crisis has spiraled, there is no time to delay this spending, because it is so critical to the impact it will have on people who need a good, safe, secure life. So it’s an affordable home,” Walcott said.
The Government is also recommending a $15 million funding increase to improve road safety by strengthening resources and peace officers across the network.
$10 million of the surplus from regional access fees is expected to be used to create a one-time relief program as energy costs soar.
The proposed spending is expected to increase overall property taxes by 5.7 per cent, or $12 a month for the average homeowner in Calgary, excluding tax burden changes.
Calgary said in a statement that it has “managed its finances responsibly over the past 10 years” compared to other large cities in Canada, with an average annual tax increase of 1.13 per cent from 2019 to 2023.
Gondek told reporters that Calgary is in a tough spot due to years of austerity and a growing infrastructure deficit due to other government orders that have shifted responsibility to local governments, which will be addressed through budget adjustments. He said it was necessary.
“We are now at a point where we can no longer continue to invest in the city. I say that because we have spent years making cuts,” Gondek said. “As a result, we learned from the government that facility maintenance and park maintenance are not keeping up and are failing people in terms of the services they need, and we want to be a part of their communities.” I am.”
The City Council will begin budget deliberations on November 20th.
