Last week Coun. Evan Woolly voted against a council decision to fund four big projects, including money for a proposed new Events Centre that would replace the Saddledome.
On Monday, he laid out his plan for how he would use at least some of that money instead – and it involves major shifts to the balance of tax burden carried by residential and non-residential property owners.
The pitch is complex, and he took the unusual step of inviting reporters to City Hall for a 45 minute sit-down session where he could explain the numbers.
He said due to the city’s tax structure, the steep and unparalleled loss of value in the city’s downtown office space which began in 2014 has shifted an unsustainable burden primarily to non-residential properties outside the downtown.
“My proposal is looking to share that burden between the city of Calgary’s budget, the non-residential tax properties, and residential properties,” said Woolley.
“If we don’t do this now, we will see a further decline in businesses across the city and we will continue to have an inequitable tax system.”
The plan can be laid out in three steps. The first is to find $100 million in savings in the current 2019 budget. Step two is to transfer some of the tax burden from non-residential properties to residential properties. Step three is to provide a one-time rebate over four years to residential property owners, to dampen the increase they would see.
Woolley’s proposal is going before council at Monday’s meeting, where it could be altered or simply voted down. He said other councillors are working on their own proposals.
He said choosing not to act will mean a further decline in the number of businesses operating in Calgary.
“We’ve already seen dozens of businesses in Ward 8 close their doors even before their taxes are due,” said Woolley.
“As a city, I think it’s incumbent upon us to facilitate a system to support the business community.”
The Ward 8 councillor admitted that finding $100 million in savings in the budget would mean service cuts, although he said it will be up to various departments to find those savings, and would not speculate on what might be cut.
“This will not be an insignificant decision,” he said. “This will have an impact. When we are looking at any budget reductions – we always start with the principal of least harm. It will be the job of our administration over the next couple of weeks to look at options for budget reductions, but I think council will have to make a decision once that comes forward.”
During his explanation, Woolley provided tax numbers scenario for the average Calgarian home, valued at $475,000.
That household would see their $1,940 tax bill jump to $2,007 after accounting for the $100 million in savings (a reduction) plus shifting the burden from non residential (an increase). They would then receive a $100 rebate – the first of four rebates – meaning their tax bill would actually end up being $1,907.
However the rebates would not last forever. That same homeowner could expect to pay about $2,156 by 2022 after their rebate.
The rebate would cost $125 million. Woolley said $70.9 million is already set aside, but the remaining $54.1 million would come from the reserve created for the four big projects which council voted to approve on March 5.
Tapping into that money will require a reconsideration on the part of council, which means Woolley will need a two-thirds majority, or 10 votes.
“The reconsideration request is for us to make a decision to support Calgarians today – not on projects we know won’t come to fruition, let alone shovels in the ground, for many, many years to come,” he said.
Mark Cooper, spokesperson for the Calgary Chamber of Commerce, said Woolley’s motion appears to be a step in the right direction.
“Many businesses within the city are struggling – some are closing their doors, and they need some innovative solutions,” said Cooper.
He added that he likes the acknowledgment that the business community has been paying an unfair share of the taxpayer burden for some time.