Calgary will need more money in for the upcoming 2023 to 2026 budget, but Mayor Jyoti Gondek said buoyant property values should limit property tax increases.
City administration delivered their 2023-2026 budget preview Wednesday, and with it a projection of expenditures over the next four years. It calls for a steady rise from an estimated $4.2 billion in 2022 to $4.86 billion in 2026.
Earlier this year, council-approved a motion to cap the increased amount needed from property tax at around four per cent. Before accounting for property tax increases due to ongoing development and redevelopment, the city is projecting an average increase in required property tax of about five per cent annually.
When property tax required for development or redevelopment is removed, the required increase settles at an average of 3.65 per cent annually.
The city administration plan was to ensure that expense increases – to keep service levels the same – matched that of population growth and inflation. The city expects another 88,000 people to move here in the next four years.
Mayor Gondek said this doesn’t necessarily mean Calgarians will see a five per cent increase on their tax bills each of the next four years.
She said all indications are that property values have increased. If they increased tax collection by five per cent with the current mill rate they would over collect from Calgarians.
“We might be able to adjust our mill rate down, still have enough to pay for inflation and population growth and keep service levels stable,” she said.
Mill rate is the amount of tax payable per dollar of assessed value of a property. If the mill rate goes down, even a home that has a slight increase in value could pay the same property tax as last year.
If a property assessment goes up enough, property tax amount would also rise.
Budget preview hits on social, transportation issues
According to city admin, the focus is on social supports, transit, improvement in the downtown and investing in hosting and hospitality. (See full budget preview document below.)
“The investments we’ve proposed today will further our economy, city-building, community supports, public safety and anti-racism programs, enable investment and innovation in the business community, and reduce climate risk. And that’s just the beginning,” said City Manager David Duckworth, in a prepared release.
“We’ll continue to deliver the services that Calgarians count on every day, while responsibly investing public funds that result in long-term benefits for our city.”
While there will be no service cuts, Mayor Gondek said that some areas will get more cash right away.
“Best indications are that some areas will need more budget dollars immediately because inflation or population impacts them more quickly and others will not need it in that same manner,” she said.
These numbers don’t necessarily include any specific requests coming from councillors. Final details on the budget still need to be hammered out over the next eight weeks.
With Calgarians feeling the squeeze from inflation, increasing interest rates and more, they may be expecting the City to do more with less. The mayor was asked if this budget was salable and she said they’re not here as “pitch people.”
“We should be here to deliver the services that Calgarians deserve and the services that they need,” she said.
“If everything we do is based on how salable something is we would be crippled by every decision.”