Edmonton city councillors continued their discussion of proposed budget adjustments on Wednesday, nearly one month after city administrators recommended a 7.09 per cent tax increase next year.
That recommended increase is 2.13 per cent above what was originally approved by city council when it set the four-year budget last December. The property tax hike was proposed in response to increased costs and reduced revenues and administrators have said it will cost an additional $41.2 million to maintain services in 2024.
“I don’t think it’s realistic to expect that we will be able to maintain a 4.97 per cent tax levy,” Mayor Amarjeet Sohi said Wednesday afternoon. “It has to be somewhere between that amount that was set last year to what administration has proposed.”
City council’s budget deliberations started on Tuesday, when councillors heard from a number of entities, including the Edmonton Police Commission, Explore Edmonton and EndPovertyEdmonton, which are appealing for more funding.
Coun. Tim Cartmell said Tuesday that this month’s budget talks will be “extremely difficult.”
“As we know, we’re already looking at a roughly 7.1 per cent property tax increase,” he said. “Everything we heard today was an additional ask for an additional addition.
“What we need to do is find a way to take the number down before we can start taking it back up again. It’s going to be tricky.”
“We’re all looking for ways of shaving that (seven per cent increase) down a little bit as long as we’re getting good value for that money,” said Coun. Jo-Anne Wright. She said the mayor was trying to contextualize how taxes work for a group of visiting kids.
“It costs $8.74 day for the average property taxpayer to maintain those 76 services that we provide to Edmontonians,” she repeated.
Sohi acknowledged the difficult choices facing city council as it tries to balance competing needs.
“I hear from Edmontonians that they’re struggling with their day-to-day expenses,” he said Tuesday. “They’re making some tough choices and we’ll have to make some tough choices too.
“I also know there’s a lot of low-income and middle-income Edmontonians that rely on public services.
“It’s tempting to have zero per cent increases, tempting to keep property taxes as low as people have tried to do in the past, but we also need to be very realistic,” Sohi added on Wednesday. “There’s a cost to run the city. There’s a cost to providing those services, and if we don’t invest in public services, then low-income Edmontonians, middle-income Edmontonians, their cost of living goes up.”
The mayor said this council is facing the consequences of past councils’ “irresponsible decisions.” He said the budget process has been “difficult and frustrating.”
“The decisions made in the past of zero tax increases have resulted in underfunding of the snow and ice program, underfunding of bus service, underfunding of turf maintenance,” Sohi said.
“Now we need to catch up and there are other pressures around inflation, other pressures around the drop in the transit revenue, pressures around salary settlements and additional cost for public safety and wellness and, at the same time, pressures on people’s affordability.
“We need to make decisions today that are not hurting the ability of future councils to be able to continue to provide quality public services that Edmontonians rely on,” the mayor said.
“We need to make up for the irresponsible decisions of the past and make sure we invest in services. People want more bus service. People want more improved snow and ice service. People want more turf maintenance to make our city look more tidy.”
Coun. Jennifer Rice stressed the importance of weighing expenses against revenues.
“We have to do a balanced budget, that is number one, no doubt. The number two (thing) is not about the cut; it’s looking at how we manage our spending.
“So my question to administration the entire morning I asked about: is this expenditure necessary? Can you explain to me why this expenditure is needed?”
During Wednesday morning’s discussions, the idea of exploring potential savings by delaying some infrastructure projects came up. Cartmell asked about the implications of possibly delaying work on a south Edmonton transit garage.
Sohi asked administrators to talk about whether delaying projects would “be costly if council is committed to doing those projects,” and how costly.
He was told delaying projects would likely see their cost rise by anywhere from 2.5 per cent to 10 per cent more.
By Wednesday evening, councillors had finished asking city administration their budget questions. Council put forward five amendments on the capital budget, including one regarding the purchase of new buses and another about reducing the active transportation package from $100 million to $50 million.
Council will continue budget deliberations on Monday. A finalized budget is expected by the end of November.
On Monday, the Edmonton Chamber of Commerce, NAIOP (Edmonton’s Commercial Real Estate Development Association), BOMA Edmonton (Building Owners and Managers Association) and the Urban Development Institute-Edmonton Metro released a joint statement raising concerns about the potential for a tax hike that is higher than previously expected.
“Anyone who understands compound interest will understand the long-term impacts that you have as you build five per cent on last year’s five per cent, and we are already in the second year (of this budget cycle) and it’s a seven per cent proposed increase,” Doug Griffiths, the president and CEO of the Edmonton Chamber of Commerce, told Global News on Monday.
He said he is hoping to see councillors find a way to keep next year’s tax increase at the previously set five per cent mark.
“Seven per cent is just too taxing on our communities – the businesses and the people that live here,” he said.
When city administrators first recommended the seven per cent tax increase last month, they said the City of Edmonton is facing a situation where it has “limited resources.”
“And we know that many Edmontonians are also stretched thin,” said Stacey Padbury, Edmonton’s chief financial officer and deputy city manager.
“We are only recommending budget adjustments that are necessary to maintain our services and deliver critical capital projects.”
Among the rising costs cited by administrators are higher utility prices — particularly electricity — and higher-than-forecast arbitrated salary settlement for Edmonton police officers.
Coun. Keren Tang said when considering core services, her priorities tend to align with council’s priorities: snow removal, safe transit and general safety.
“Housing is a really challenging one but I think over time, there are elements of that that can be considered core. When it comes to encampments specifically … Edmontonians also want to access the river valley safely. We don’t want to see people necessarily using transit centres or the river valley as homes because they’re not suitable.
“I think those elements have to be considered as: what the city can do,” Tang said. “We are funding where we can but if other levels of government don’t step up, we’re always going to be playing catchup, we’re always going to be inadequate … and our service level is never going to be up there.”
Tang said Edmonton is not alone in this budget and taxation struggle.
“Globally, we’re experiencing a lot of challenges when it comes to affordability … When talking to colleagues and council members in, say Calgary, they’re looking at close to eight per cent. In Saskatoon, 7.1 (per cent). We’re looking at Airdrie. I think recently they went 6.9 (per cent tax increase).
“Every municipality is struggling with the same kind of financial gaps that we’re experiencing. We’re all struggling trying to stay low. If we can’t increase service level, where can we cut? Everyone is trying to bring it down to something more reasonable,” she said.
“In some cases, maybe what projects are we not going to do and where can we maybe augment that service?”
Property owners will learn about their 2024 assessment in January and will receive their 2024 tax notice in May.
–With files from Global News’ Sarah Komadina and Karen Bartko
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