It’s clear that how we pay for Edmonton needs fixing. That’s been the driving motivation behind this blog series. Property taxes are a stable source of revenue technically speaking but after years of steady property tax increases in order to catch up on years of previous neglect, I believe we’re at the limit of those increases. That’s why we need to make sure that property tax rates don’t increase in our next operating budget cycle. In fact, I think we need to freeze property taxes as soon as this fall’s supplemental budget.
At our council meeting last week, I put the possibility of a zero percent tax increase on the table for 2020.
Since then I’ve been accused of being a populist, playing right into the provincial government’s hands, taking us back to the 1990’s, putting Edmonton’s economy at risk, basically walking outside and tearing up roads, sidewalks and sewers with my bare hands.
Politics and budgets are often fraught with hyperbole. I’m guilty of it too. But this idea is based on the ever-increasing volume of concern about the effect of property tax increases on the residents in Edmonton and on the pleading of the small and medium-sized businesses responsible for much of Edmonton’s vibrancy and employment. In fact, I am aware of numerous beloved businesses in Ward 10 whose taxes have increased to a point where they are now challenged to invest to grow or innovate their business to better serve their customers and our communities.
Fiscal Reform Needed
The first step toward any sort of fiscal reform is to be clear about your strategy and what you are trying to achieve. Our strategy is simply to build an amazing city. Read more here.
The very next steps must be focus, discipline and restraint. Not just when the larger economy is precarious, but always – and especially when the larger economy is precarious.
In the next blog post, I will detail many ideas worthy of consideration and debate in recognition of the role that big cities play in driving future prosperity in Alberta and Canada. But they are structural ideas and processes that will take time to consider, practice and produce results.
Where we can begin today is to reduce spending in our city budget and by reducing the cost pressures on residents and business owners by not asking for more property tax this year.
This tax relief will not destroy our commitment to good asset management and infrastructure. We have multiple renewal programs approved in our existing capital budget and also within our operating budget.
This tax relief will not upend Edmonton’s economy. The suggestion that cutting 2-3% from a $2.5 billion budget will trigger a recession is a dubious claim at best. In fact, the opposite statement appears true; that increasing our budget and property taxes by extension would do more economic damage than slightly cutting the budget (This is backed up by a report that came to Council last fall after I made an inquiry into the effects of property taxes on small and medium-sized businesses. The report demonstrates that property taxes hit these businesses the hardest leaving them with little choice but to scale back operations, including cutting staff).
Of course there will have to be sacrifices on our part. The question is what can be cut and what are those things that we have to protect. This is a conversation I want to have as we head toward our budget debate this fall.
I also believe we can continue to offer and build amazing things in our city to make sure it grows more densely, more vibrantly and truly does become an established destination and home for young, educated, entrepreneurs, innovators and professionals. We can do this through creative partnerships with our business community and our private sector.
Paying for and financing the great stuff many citizens want doesn’t require that raising taxes be the only strategy. Truthfully, every other business and organization in Edmonton has had to adapt and alter their budgets, it’s time that we adapt too.
This is why we need to expand our toolkit. That’s where the next blog post comes in. Stay tuned for my thoughts on what tools should be added and what current tools need fixing.