No major property tax hike in Winnipeg's 2019 budget, but road repairs take a hit
Homeowners face another 2.33% property tax increase; road renewal budget drops $30M
Winnipeg homeowners will be dinged with the same property-tax hike this year they've seen every spring since 2015, despite the mayor's warnings of a potential larger hike.
But the city will spend less on road repairs this year, as Brian Bowman suggested earlier this week.
The 2019 Winnipeg budget includes a 2.33 per cent property tax increase, the same hike the city has witnessed every year since Bowman's first budget in the months after he was elected mayor.
The hike this year will add about $40 to the average annual household property tax bill.
Two days ago, Bowman warned Winnipeg could face a hike as high as 9.4 per cent this year as a response to a $40-million provincial funding shortfall for road repairs.
The mayor gave himself some wiggle room in his 2018 election promise to allow the hefty increase, but the city's spending plan for 2019 does not include a major property tax hike.
Instead, the city budget unveiled on Friday calls for a reduction in spending on road renewals. Winnipeg plans to spend $86 million fixing its roads in 2019, down $30 million from the $116 million budgeted last year.
Increasing road repairs was a major election promise for Bowman in 2014 and 2018. The mayor blamed the reduction in this budget on what he described as the province's refusal to follow through on its road-renewal cash commitments for 2018.
Bowman said it would be more responsible to reduce road renewal spending than to hit homeowners with higher property taxes.
"Overall, this will mean fewer road, cycling and pedestrian projects this year," he told reporters during a budget lockup at city hall. "I think it's safe to say this is the city's new road reality."
Tax warning was 'doomsday scenario': Browaty
North Kildonan Coun. Jeff Browaty, Bowman's vocal opponent at city hall, chided the mayor for proposing the "doomsday scenario" of a 9.4 per cent property tax hike only days before the budget.
"I don't think it was responsible for the mayor to be floating that," Browaty told reporters after the budget was presented at a special meeting of executive policy committee.
Bowman defended his rhetoric, insisting a larger property tax hike was a legitimate option facing Winnipeg.
Overall, the city plans to spend $1.125 billion in 2019 on services — everything from insect control to snow removal to emergency services — an increase of $44 million from 2018.
The Winnipeg Police Service and Winnipeg Fire-Paramedic Service will receive the largest operating increases, receiving $11 million and $9 million more, respectively, mainly to cover the cost of salary increases.
Infrastructure spending to drop
At the same time, the city plans to spend less this year on buildings, bridges, roads and other forms of infrastructure that are not financed through water and sewer bills. Tax-supported infrastructure spending will be $244 million, down from $246 million in 2018.
As recently as 2016, the city spent $369 million on infrastructure.
There are no major road and bridge projects planned for this year aside from completing the Fermor Avenue bridge rehabilitation, a $10.9-million job that started in 2018.
The city plans to spend more this year on demolishing the old Public Safety Building and the adjacent Civic Centre Parkade — a $10.5-million job — than it does on any road-repair project. The largest roadwork job is a $9.8-million rehabilitation of Fermor Avenue between Lagimodiere Boulevard and Plessis Road.
Bowman said the redevelopment prospects for the former parkade and police headquarters mean the city could soon take in more property taxes from the site.
Larger infrastructure projects have been erased from the city's long-term spending plans. The capital budget forecast makes no mention of planning for the reconstruction of the Arlington Bridge, the replacement of the Louise Bridge, the western extension of Chief Peguis Trail or the southern extension of the William Clement Parkway, to name some of the megaprojects that were supposed to be on the city's radar.
The city also is continuing to reduce the amount of hard cash it spends on infrastructure, as opposed to money it borrows from lenders or receives from other levels of government.
The city only plans to transfer $21 million from the operating budget to the capital budget, down from $23 million last year. As recently as 2016, the city moved $75 million a year to the capital budget.
Bowman said the city needs more help from Ottawa and Manitoba to pay for infrastructure, including major bridge projects.
Winnipeggers may deserve a rebate, province says
Manitoba Finance Minister Scott Fielding, a former city council finance chair, insisted the province honoured its 2018 funding commitments and encouraged the city to do more to keep its costs in line.
He also chided the city for raising property taxes.
"I know the city has run two surpluses over the last two years, and so quite frankly our citizens have been overcharged over the last two years. Whether they should be asking for a rebate, I don't know," Fielding told reporters at the Manitoba legislative building.
"We don't think that raising taxes is something that we're looking at from the provincial government," Fielding said. "They should be looking to be as efficient as they can and not go to the taxpayer first."
Bowman countered the city has no choice but to balance its budget every year and cannot run a deficit the way the province does.
The province, meanwhile, unveils its budget on March 7. Fielding hinted there could be more money for the city in that spending plan.
'It's a mess': construction advocate
Chris Lorenc of the Manitoba Heavy Construction Association criticized the reduction of road renewal funding. He also lambasted the city and province for squabbling in public over infrastructure spending he described as being a crucial component of the provincial economy.
"It's a mess. It's a mess that has to be corrected," he said, urging the city and province to put together a new fiscal deal he described as long overdue.
"This is not an issue of whether or not the city manages well its fiscal affairs. In our opinion, it does."
Earlier this week, Finance Minister Fielding accused the city of managing its spending poorly.
The budget also calls for a reduction in spending on bike and pedestrian infrastructure. The city is poised to spend $3 million on cycling and walking routes this year, compared to $5.4 million in 2018.
Mark Cohoe of Bike Winnipeg calls it a drastic cut.
"It's really going to set us back a number of years. It's really devastating this program," he said.
Transit promises kept
On the Winnipeg Transit front, Bowman kept several of his promises. Transit fares will be frozen this year at $2.95 for a full adult fare, and driver safety shields will be installed on all buses at a cost of $3.2 million.
And the city will introduce some form of low-income bus pass, with the details to be determined following public consultations. While the cost of the low-income subsidy remains unknown, the city has set aside $236,000 to issue the physical Peggo passes.
City council will scrutinize the budget at committee meetings over the next three weeks. Council will vote on the budget at a special meeting slated for March 20.
2019 Winnipeg budget highlights
Operating budget (spending on city services): $1.125 billion, up $44 million from $1.081 billion in 2018.
Capital budget (tax-supported spending on infrastructure and equipment): $244 million, down $2 million from $246 million in 2018.
Cash to capital (transfer from operating to capital budget): $21 million, down $2 million from $23 million in 2017.
Property tax hike: 2.33 per cent, unchanged from 2018.
Projected property tax haul in 2018: $608 million, up $22 million from $586 million in 2017. This is the result of the hike and new developments within the city.
Frontage levy hike: Not happening for the third straight year.
Winnipeg Transit budget: $199 million, up $6 million from $193 million in 2018.
Transit fare hike: None this year.
Low-income bus pass: Will be introduced, but the details are to come.
Police budget: $299 million, up $11 million from $288 million in 2018.
Fire-paramedic budget: $202 million, up $9 million from $193 million in 2018.
Road-repair budget: $86 million, down $30 million from $116 million in 2018.
Public Safety Building and Civic Centre Parkade demolition: $10.5 million.
Fermor Avenue rehabilitation: $9.8 million to rebuild the road from Lagimodiere Boulevard to Plessis Road.
Fermor Avenue bridge replacement: $4.6 million to complete the job this year.
Water and sewer dividend: Rate dropped to 11 per cent from 12 per cent, which moves a total of $34 million into general revenues.
With files from Ian Froese