Council Passes 2017 Budget

Council sets budgets over four year cycles. The current cycle runs from 2015-2018. This style of budgeting has advantages, but also presents a few challenges. The economic conditions can change quite dramatically over a four year period. Council has the ability to make annual adjustments to the approved budgets in order to respond to emerging economic conditions.

Council

Earlier this year Council gave direction to City Administration to prepare 2017 budgets. Calgarians were scheduled to see a 4.7% increase in their property taxes for 2017. Council direction saw this increase reduced to 1.5%. Council will also be providing a one-time rebate to residents from our Fiscal Stability Reserve to bring the effective tax increase for 2017 to 0%.

Earlier this week Council approved the specifics for the 2017 budget. Here are a few of the highlights:

  • Homeowners, transit riders, recreation users, park users and business owners will get $66.2 million in fee relief for:
    • Transit fares
    • Recreation, parks and pet service fees
    • Planning, development and fire code inspections and permits
    • Landfill tipping fees
    • Green Cart program fees in 2017
    • The low income transit pass will continue to be provided at the current rate for the first quarter of 2017. After that, a sliding scale fare schedule for Transit’s Low Income Monthly Pass will be implemented based on income;
  • Those being hit the hardest during this economic downturn will benefit from $9.1 million in increased funding for community and social programs, community events, affordable housing and initiatives to support new and existing businesses;
  • Property tax reduction and property tax rebate are being achieved through a combination of corporate funding sources, department savings from efficiencies and service reductions, totalling $73 million;
  • The City’s Capital Investment Plan will help spur economic growth and diversification, maximizing investment to create jobs, build and maintain infrastructure, and attract and retain people, business and investment to Calgary. The Capital Investment Plan will be funded through existing capital sources and put Calgary in a better position to take advantage of federal and provincial grant funding; and,
  • City Council will set aside $15 million from the Fiscal Stability Reserve to assist Calgary businesses facing challenges during the economic downturn.

During our discussion this week we heard from Calgarians and had a robust discussion on the support Calgarians need during these difficult economic times. There are two key areas that I felt important to consider in our budget discussions this year:

  • Relief for businesses outside of the core. We are mandated by the province to apply the tax rate to the assessed value of a property. This means that the amount of tax you pay is directly tied to the value of your property. In many cases we have seen reductions in property values in the downtown core. Property values have not declined to the same extent outside of the downtown. This means that businesses in the outlying areas will potentially see tax increases to offset declining property values in the core. In my opinion many of our small and medium sized businesses in Calgary’s outlying areas are the least capable of responding to short term economic shocks. It is imperative that Council takes steps to keep these businesses competitive and continues to build Calgary as an attractive destination for business. In order to provide support to businesses Council has earmarked $15 million in relief to businesses for 2017. Administration will report back to Council in January with options for how this relief can be applied.
  • Provincial property taxes. As you may be aware your property taxes are made up of a municipal and provincial component. The City collects taxes on behalf of both orders of government and once the province sets their budget they submit a requisition to The City. We do not have control over what the province requests from your property taxes. Their property taxe requisition represents a percentage of the provincial spend on education. With increases to education spending, Calgarians saw a big provincial increase on their property taxes last year. Calgarians need to see the same commitment from the province that they are seeing from Council when it comes to property taxes. As such, Councillor Chabot and I brought in a Motion Arising that asked Mayor Nenshi to write Premier Notley to consider holding the line on property taxes for 2017. This motion passed.

action-plan

Council has given some clear direction on what steps need to be taken to react to the economic realities facing many Calgarians right now. I’m encouraged by the steps taken on streamlining many of our budgets and I hope this is a conversation that gains more momentum in the years to follow despite the current economic climate. We are starting to see how Council direction to administration is resulting in greater efficiencies for many of our business units. The Zero-Based Review (ZBR) program is one example where we have independent auditors go through budgets for particular business units and provide recommendations on where savings can be found. We have gone through the ZBR process for a number of business units, and I am looking forward to an expansion of this program. You can get more details about ZBRs at Calgary.ca/ZBR

Calgarians still expect to see us work towards making meaningful investments in their communities. Our capital plan will not only make Calgary a more attractive place for future investment, it will create jobs and stimulate our economy during some of these difficult times. We need to recognize that we are still a growing city. Even during these difficult economic times we are seeing positive growth, and our growth projections suggest that we need to prepare for the next million Calgarians that will join our city over the next 30 years. This puts greater pressure on us today to manage growth properly and keep working towards higher value for your tax dollars. We are starting to see some of that value with recent investments in southeast Calgary, but we still have a lot of work to do.

You can get more information on the 2015-2018 budget cycle by visiting Calgary.ca/actionplan