Kusie: City needs to cut its property tax hike

By: Stephanie Kusie

There have been countless stories in Calgary’s media as of late about layoffs and pay cuts. The province’s current recession is hurting a lot of families.

With that in mind, city hall should scale back its proposed 4.7 per cent property tax hike. A large tax hike like that is the last thing many families need right now. Thankfully, it appears council will be presented with a 3.5 per cent tax increase next week, but more needs to be done.

I know the problems Calgarians are facing well, as several supporters of Common Sense Calgary have told me they’ve been laid off or have had their pay cut. Many people went on to describe how they’ve had to put off buying a new vehicle, or won’t be making a winter getaway trip. Others have described decisions like dining out less frequently and cancelling their cable.

The concerns I’ve been hearing from Calgarians is one of the main reasons why Common Sense Calgary recently called for city council to reduce its planned 4.7 per cent property tax hike to 1.3 per cent. The latter figure represents Statistics Canada’s inflation rate calculation for Calgary.

Our recommendation to council was more than reasonable. We didn’t ask city hall to come in with massive layoffs, drastically cut their overall spending, or deliver huge pay cuts (as some businesses are doing). No, we just asked city council to trim their large tax hike down to a more reasonable level. With any luck, council would go even further and freeze taxes this year.

One has to remember that council has been increasing property taxes for years — often well above inflation. For example, council’s 2013 tax increase was 13.1 per cent; more than eight times the rate of inflation at the time. Surely, after watching a tidal wave of tax dollars flow in for quite some time, council could now make a few tough spending decisions?

No doubt, some on council will retort that a large tax increase is “necessary” to pay for new infrastructure as Calgary’s population keeps going up. At first blush, the argument sounds plausible.

More people does mean more homes, apartment buildings, condos and other buildings are needed. And with those projects, typically comes road and sewer work by the city, garbage pickup, more policing services, etc. Calgary’s population has boomed in recent years, growing by 10 per cent over the past five years alone.

However, one also has to remember that all the new people moving to Calgary also pay property taxes, fees and other revenues to the City of Calgary. As Calgary’s population has ballooned, city hall has seen its revenue increase substantially. Over the past five years alone, the city has seen its revenues increase by 33 per cent; from $2.7 billion in 2009 to $3.6 billion in 2014.

Second, note that when the city builds a new road or sewer pipe, it doesn’t take the financial hit in a single year. Typically, council will borrow money to pay for the asset, spread the bill out over the life of the asset (often a 25-year period or longer) and use city revenues to finance the debt.

Make no mistake, convincing city hall to scale back its large tax hike won’t be easy. Achieving a victory will take thousands of Calgarians to take five minutes out of their day and call or e-mail their councillor. Calgarians of all walks of life will also need to do things like write letters to the editor in support of belt-tightening at city hall, call into radio talk shows and sign our petition. Plain and simple, city council needs to hear the message loud and clear: the large tax hike should be scaled back to 1.3 per cent.”

If council doesn’t get the message, then prepare to hold on tight … especially if your family is already feeling the pain.

Stephanie Kusie is Executive Director of Common Sense Calgary.

This oped was originally published in the Calgary Herald on September 23, 2015.

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