Without service cuts, Edmontonians could face a 13 per cent tax hike next year.
Councillors were given a preview of next year’s financial outlook at Wednesday’s executive committee meeting. A preliminary estimate projects a tax levy increase of 13 per cent in 2025 without making any adjustments.
With some adjustments and deferring other costs, the city projects an 8.8 per cent hike next year.
The city said it is facing $88 million in budget challenges, citing inflationary pressures, a rapidly growing population and the changing service needs of Edmontonians.
“The impacts of inflation are with us still and it is driving up costs as far as fuel costs and things like that,” Coun. Aaron Paquette said.
The city said it will look at all options to address the financial challenges while maintaining its financial health.
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“We’re committed to finding a balance between delivering the services Edmontonians rely on and keeping property taxes and user fees manageable, but this is especially difficult given the budget challenges that both the city and Edmontonians are dealing with right now,” said Stacey Padbury, the chief financial officer and deputy city manager of financial and corporate services.
“The financial challenges we face are complex and will take several years to address. This will require us to make tough choices between funding these ongoing budget challenges through increased property taxes and user fees or by reducing service levels, and it will likely take both strategies to ensure our continued financial stability.”
Both of the tax hike numbers floated Wednesday are too high, according to Mayor Amarjeet Sohi.
“Either maintain what we have already approved, which was seven per cent — which I find high — or reduce it,” he said.
“Edmontonians don’t have the ability to absorb more and we need to be mindful of that.”
Earlier this year, council approved an 8.9 per cent tax hike for 2024. Inflation and decreased revenues were cited as reasons for the increase.
“We cannot continue to raise taxes to pay for services without looking at the entire service and service review and looking into every department, saying where we can do less,” Sohi said.
The report was accepted as information on Wednesday. Council members will look at the budget in the coming months.
“Core services will not be affected, as the mayor mentioned, but there’s a lot of other services that people might think, ‘That’s part of my city’; those things might be affected,” Paquette said.
Administration will present its fall budget adjustment recommendations in November and council will deliberate on any adjustments in December.
— with files from Erik Bay, Global News.