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Cap put on property tax revenue collected for upcoming Calgary budget

Calgary city councillors have capped the potential revenue required through property tax, as they’re worried about skyrocketing costs in the upcoming four-year budget.

Calgary councillors agreed to cap the average annual revenue increase to the city budget collected via property tax at 3.65 per cent. That would maintain existing city services and programs.

The projected amount of total revenue needed for 2023 is roughly $4.364 billion. Of that, $2.235 billion is needed from property tax revenue. By 2026, that amount sits a hair over $2.4 billion.

Coun. Sonya Sharp added the amendment that required the cap on a revenue increase. She said they had to provide that direction to administration so they could develop the budget based on that amount.

“If we don’t set boundaries, the world’s their oyster,” Sharp said.

“We don’t have a blank page, blank cheques, right? And neither do Calgarians. So, we needed to set a ceiling, not a floor.”

While the amount of revenue required by the city may jump, the amount of tax increase on a typical Calgary home fluctuates with assessment and mill rate adjustment.  According to preliminary numbers provided to council members, there could be a mill rate decrease for Calgarians.  Then, a property tax increase or decrease rests on the increase or decrease in the assessed value of a home.

(Make sense?)

Specific property tax impacts will be discussed later in the fall. Though, in a city release, the city did project a roughly 3.65 per cent annual increase to property taxes.

Funding envelope increase reflects population and inflation           

Earlier in the day, Calgary city councillors received results from the spring pulse survey. It’s an annual gauge of citizen values and service views.

That survey showed roughly half of Calgarians would accept a small budget increase that fell in line with inflation and population growth.

Mayor Jyoti Gondek said without the increase for population and inflation growth, the city budget would be flat compared to last year.

“What you saw today is Council basically saying, since we have not had a full unpacking of the budget, what we are recommending is that we don’t increase the budget over what it was last year,” she said.  

“That’s essentially what you’re getting.”

This revenue cap still doesn’t include major potential funding asks for the fire department. Nor does it include the recently approved climate strategy. Nor does it include any additional funding for transit.

City administration said they’ll continue to gather more information in the coming months. The amount of cash required from property tax could change come November – but not go higher.

“This is a critical step in our journey to develop service plans and budgets for the next four years,” said City Manager David Duckworth, in a prepared release.

“Calgarians have high expectations about fiscal responsibility and receiving value for services provided in return for property taxes and fees, and the direction we received today will allow Administration to draft plans and budgets that are affordable and deliver value for Calgarians and businesses.”

City admin did point out that earlier inflation rates for Calgary were in the eight per cent range. Recent targets show it at around 5.5 per cent.

Along with the revenue discussion, councillors heard that wastewater collection and treatment cost would rise 2.5 per cent. Waste and recycling collection costs would also increase by 2.8 per cent.