City councillors are discussing Tuesday and Wednesday amendments to the operating budget that would translate to a 8.7 per cent property tax increase for Edmonton homeowners.
While debate is scheduled for two full days, most councillors admit not much can be done at this point to change that rate.
“We’re not solving this today,” said Coun. Tim Cartmell.
He said there’s not much hope for reducing the 8.7 per cent increase this year. There might be a few projects in the capital plan that could be stretched over a longer time, Cartmell suggested, but nothing that can be fully explored in one or two days.
“I don’t like this budget. I don’t support this budget. But voting against this budget, voting ‘no,’ means we go back to the 6.6 (per cent) from November,” Cartmell said. “And none of these pressures go away. It means we create another big deficit… and that big deficit gets paid in subsequent years.
“The discussion today, we’re going to go through a few changes, a few wiggles, a few wobbles.
“We need to tear it down to the studs and rebuild the budget quite frankly, and that’s not going to happen by 9 tonight,” he said. “That’s a longer journey.”
Earlier this month, Edmonton released its spring operating budget adjustment report, recommending an 8.7 per cent tax increase for 2024 — up 2.1 per cent from the 6.6 per cent increase that was approved in November 2023.
The city said the increase is necessary to respond to several increasing cost pressures and continue to provide the services outlined in the 2023-2026 budget.
However, Cartmell wants the city to take its budgeting process down to the studs and start from scratch. He says that was attempted through the so-called OP12 motion. Council directed city staff to find $60 million in savings and $240 million in areas the budget could be redirected to more important places. Cartmell says that attempt failed.
“I think it’s really hard to essentially cut your own department. I think it’s really hard to look at people who you’ve shared a desk with or shared a space with for many years… and turn and say: ‘You, you and you, you need to go.’
“Quite frankly, council has to take the reins on this. I think we probably need some outside help that reports directly to council and not through administration,” Cartmell said.
Councillors heard Tuesday that some of the additional cost pressures are coming from long-term labour costs, fire and police services and WCB premiums. The city is getting less revenue from transit and less funding from the province.
“We are under a lot of pressure,” Mayor Amarjeet Sohi said. “An 8.7 per cent tax levy increase is already high enough.
“We’re investing money in protecting services, we’re adding more important services like hiring more police officers, transit peace officers, social workers, building more housing, taking action on climate change, improving snow and ice, putting more money into public transit.
“I think we need to look for opportunities to reduce and look to areas we can do without. I am really worried that the balance that we want to create — preserving services, protecting services, enhancing services and keeping taxes affordable — that we’re tilting towards higher property tax increases,” Sohi said.
“We are not given the proper amount of property taxes that are owed to the city through grant funding. That amount continues to accumulate. It was $60 million. Now it’s almost $80 million that the province owes to us in the form of property taxes that they should have paid,” the mayor said.
“If they paid those taxes, we’d be in a much better position. We could probably reduce property taxes to Edmontonians if the province is stepping up to fulfill their responsibility.”
The province is not required to pay taxes to the City of Edmonton on its properties, but a long-standing grant program has seen the province essentially reimburse the city for some of those costs.
In 2019, that amount was reduced to 50 per cent.
Sohi is also open to a deeper look at how the city budgets.
“I also want to dig deeper… having more in-depth conversations with the administration around how the budgets are built because there’s a lot of money in the base budget of the city.”
The tax increase means homeowners should expect to pay $65 more for every $100,000 of their assessed home value in 2024.
Broken down, the average household in Edmonton would pay about $8.96 per day. The city noted the tax increase will affect individual owners differently, depending on how their property’s assessed value compares to the market.
Coun. Aaron Paquette pointed out that the bump from 6.6 to 8.7 per cent translates to just a couple cents a day.
“The average home is looking at about a two-cents-a-day increase in taxes if this goes through. So, we would like to reduce that if we can. There aren’t a lot of options for reductions, however, there are some options that I have been thinking about for revenue generation.”
Paquette wants to look at selling parcels of the Blatchford land in central Edmonton in order to obtain some property tax income.
“There are ways that we can maybe parse out some pieces, sell them, and get revenue that way. And then, when the units are built, there’s tax revenue there that would offset the taxes for everyone else.”
Budgeting is about increasing revenue as well as calculating expenses, Paquette said.
“What can we do long-term to ensure that we get back to where we were, which was really reasonable and low tax rates? For the last 25 years, I think that we’ve been the lowest of all Canadian municipalities. Now we’re on par with what a lot of other municipalities are doing now. I’d like to get back to being lower.”
Cartmell suggested a stronger focus on event attraction.
The spring supplemental operating budget adjustment is the last step in finalizing the annual tax increase.
The city said it will bring forward bylaws on April 30 to set the tax rates based on the approved tax increase. Tax notices will be mailed to all property owners on May 24, with property taxes due on June 30.