Time to give Edmonton taxpayers a break, says councillor

It's time to use some of the money in the city's Financial Stabilization Reserve to reduce the proposed 2.85 per cent property tax increase for next year, says Coun. Mike Nickel.

The city should use up to $9M from the 'rainy-day fund' to reduce the proposed tax hike for 2017

City councillors voted Tuesday to put the $64.3 million surplus from the 2016 operating budget into the Financial Stabilization Reserve, bringing the total amount in the fund to $137 million. (Lydia Neufeld/CBC)

It's time to use some of the money in the city's financial stabilization reserve, the so-called "rainy-day" fund, to give Edmonton taxpayers a break, says Coun. Mike Nickel.

At Tuesday's meeting, councillors voted in favour of putting all of the $64.3-million surplus from the 2016 operating budget into that "rainy-day" fund, bringing the total reserve to $137 million.

Nickel is proposing to reallocate $8 million to $9 million from that fund to reduce the 2017 proposed tax increase, which is proposed to be 2.85 per cent.

"I think that we have to show that we understand and reflect the times that we're in," said Nickel. "Time's aren't good. It's small comfort to people who are out of a job and their [employment insurance] payments are coming to an end, that we're going to throw another tax increase on them."

The proposed 2017 tax increase includes 1.5 per cent for neighbourhood renewal and 0.6 per cent for LRT expansion.

Coun. Mike Nickel wants to give taxpayers a break

6 years ago
Duration 0:43
Coun. Mike Nickel wants to use up to $9 million of reserve funds to reduce taxes for Edmontonians

'People have hit the wall'

Looking back over the last 10 years, taxes have gone up well over 70 per cent, Nickel said.

"I'm wondering if people have hit the wall in terms of their capacity to pay," he said.

When do we use the fund if it's not for today?- Coun. Mike Nickel

Calgary city council voted in June to freeze property taxes in 2017, covering off a proposed 1.5-per-cent tax increase with a one-time withdrawal of approximately $22.5 million from its Fiscal Stability Reserve. That reserve fund now sits at $370 million.

"It's great politics, I get it," Mayor Don Iveson said. "I understand exactly why they did it in Calgary, especially with some of the deeper economic challenges that they have there.

"It's not good fiscal policy. I would say actually that it's somewhere between opportunistic and irresponsible."

Taking one-time money the city has in a surplus only lowers taxes for one year, and those taxes would have to be raised the following year, Iveson said.

But Nickel appeared to agree with Calgary council's decision.

"When do we use the fund if it's not for today?" asked Nickel. "We can always top it up."

The city is a $2-billion corporation, so there should be ways to find that money, he said.
Coun. Mike Nickel wants to use money from the surplus to bring down the 2017 tax increase. (Lydia Neufeld)

"A one-shot thing that depletes our reserve that is there for when we have significant emergencies, particularly weather and snow-related emergencies, I think is not responsible," said Iveson.

The city is expected to discuss its operating budget for 2017 at a meeting on April 11. Nickel said he hopes he can bring this issue forward at that time.

"I think this is a debate worth having," he said.

The savings in the 2016 budget includes $26 million that wasn't needed for snow and ice removal last year.

We initially reported the city's 2017 tax rate incorrectly. It is 2.85 per cent.