UCP budget almost doubles 2020 tax hike for Calgary homeowners
'It's just ugly news,' one councillor said of the property tax increase
City council's message to Calgarians about this spring's tax hike is: it's not all our fault.
Council learned Monday why its members might be hearing from angry taxpayers this spring.
The combined impact of the UCP budgets last fall and last week will result in an 11.3 per cent increase in the provincial education property tax for Calgary's residential property owners.
When blended with Calgary's approved 7.5 per cent tax hike, it means homeowners are looking at a combined tax hike of 8.9 per cent for 2020.
For the median-priced Calgary house of $455,000, it means a tax hike of $280 this year. Of that amount, $130 will land in provincial coffers — not to city hall.
"It's just ugly news," said Coun. Ward Sutherland.
The total tax bill. <a href="https://twitter.com/hashtag/yyccc?src=hash&ref_src=twsrc%5Etfw">#yyccc</a> <a href="https://t.co/ugy4RXOYQ9">pic.twitter.com/ugy4RXOYQ9</a>—@CBCScott
He predicts taxpayers will direct their anger at city council.
"I don't think they're going to be very happy," said Sutherland.
The magnitude of the provincial tax hike caught him off-guard.
"We did not expect that of course. We have no capacity to cut and make up for that at all. We've already done our cuts."
Provincial budget upsets city plan
Last summer, council cut $60 million in spending. The move resulted in 233 job cuts and more than 100 layoffs in city departments.
Council also gave business property owners $70 million in a rebate to blunt tax increases.
The timing of the provincial tax hike has landed like a sledgehammer at city hall.
Council approved a tax freeze for 2020.
But because of the ongoing impacts of the drop in downtown property values that have pushed up property taxes for business properties outside the core, council decided to shift some of the tax burden from non-residential accounts to homeowners.
That means a tax increase for homeowners while many business properties will see a decrease or small increases.
The impact of that tax shift lands in this spring's tax bill envelopes at the same time the province is boosting its property tax for homeowners.
For residential customers, 63 per cent of their property tax bill goes to city hall while the other 37 per cent goes to the province.
For non-residential property owners, 81 per cent of their bill goes to the city while the other 19 per cent goes to the Alberta government.
Council wants facts in bills
It all creates a communications challenge for city council.
"There's an incredible pinch on all Calgarians right now and it's a challenge to communicate all of the factors that are going into these decisions without simply saying: taxes are going up," said Coun. Jeff Davison.
Several council members are asking city administration to come up with ways of getting more information into the tax bill this spring to let people know what's happened and where their money is actually going.
City manager David Duckworth said he's talking with the finance department about putting an insert into tax bills that spells out that the city has a property tax and that it simply acts as a collector for the province's education property tax.
"We still might have the one bill that shows everything but at least have some backup information that's very clear for people, that draws their attention to read it," said Duckworth.
The provincial budget is causing other troubles for the city.
Another hit for police
Council heard the Feb. 27 budget saw another $4-million reduction in fine revenues for the Calgary Police Service.
Last fall's budget resulting in the withholding of $13 million in fine revenues. City council decided to fill in that gap last fall but there's no word yet on how this newest reduction will be handled.
The city is expecting a provincial cut in maintenance funding for affordable housing units will result in 100 units being closed for use.
Provincial budget cuts for Calgary Housing. 100 affordable units may close in 2020. Calgary needs 15,000 new units. <a href="https://twitter.com/hashtag/yyccc?src=hash&ref_src=twsrc%5Etfw">#yyccc</a> <a href="https://t.co/Nx9FKteNxw">pic.twitter.com/Nx9FKteNxw</a>—@CBCScott
Coun. Druh Farrell calls the cut a big concern for the city as it will hurt vulnerable people.
Rather than close units, she said the city wants to add thousands of new units to help people who are on a waitlist.
The Calgary Housing Company, a city-owned agency, looks after provincially owned affordable housing buildings.
But she said many units are in poor condition and provincial money is needed to keep them safe for people to live in.
"Calgary Housing Company is not a slum landlord. We don't want to be a slum landlord," said Farrell.
She pointed out that the province will save money in the long term if it creates more units and keeps people in those units rather than on the streets.
"We want our residents to be living in safe, clean housing. Stable housing. We know that it saves us money in the long term," said Farrell.
"Homelessness is not a cheaper solution. It's a more costly solution."