Manitoba·Analysis

As Winnipeg faces tough budget choices, is a tax hike an inevitable conclusion?

The very public disclosure of possible cuts to services, facilities or grants, combined with an aging infrastructure and dwindling revenue, has led to speculation that hiking taxes beyond the 2.33 per cent threshold the mayor campaigned on may be unavoidable.

Finance chair adamant city will hold to 2.33% increase, but other councillors say 'wait and see'

The Social Planning Council's Kate Kehler, centre, was at city hall on Nov. 28 to call for tax increases, which she argued are needed to protect the city's most marginalized. As the city grapples with difficult budget decisions, some councillors suggest they haven't ruled out the possibility of an increase. (Sean Kavanagh/CBC )

There isn't actual blood on the floors of Winnipeg city hall these days, but you could certainly cut some of the tension with a knife.

Doors are being slammed. Board rooms echo with angry words and tempers flare at meetings, both public and private.

Mayor Brian Bowman's four-year budget process has set tough targets for each department, with increases in all departments — where there are increases — below the cost of inflation.

The response from senior managers in the latest budget planning process — a process revamped in a stated effort to be more transparent — has been to propose deep cuts to meet those guidelines. 

Wave upon wave of residents and community groups, union leaders and activists arrive at city hall to push back.

That includes parents, with children in tow, who say their kids will take a step back if a library closes. Police who insist the streets won't be as safe if there are fewer officers. Volunteers who talk of rivers choked with garbage if a grant is taken away.

Swimmers won't get to swim, skaters won't skate and splash pad users won't get to — well, splash.

Citizens and community groups have appeared at city hall to push back against proposed budget cuts. That includes David Danyluk, who made his way to city hall with a canoe on his back on Nov. 25 to protest a proposed cut to the Save our Seine river preservation group. (Radio-Canada )

Throughout the newly modelled budget process, there appears to be a lingering air of inevitability. 

That somehow the very public disclosure of possible cuts to services, facilities or grants, combined with an aging infrastructure and dwindling revenue, is leading us all to an inevitable conclusion.

Tax hike.

And the air around city hall seems tinged with an even deeper suspicion — that somehow a hike is inevitable, because it was planned that way. 

Committed to 2.33%

Coun. Scott Gillingham — city council's finance chair, and the architect of much of the budget-planning process — denies any notion the hard targets set for the departments, and the very public proposals for cuts, are meant to create an atmosphere that makes it easier to raise property taxes.

He acknowledges, though, it could be construed that way.

The kind of budget deliberations the public has seen in recent weeks were, in the past, conducted behind closed doors.

Flipping budget deliberations into a new form, where department heads bring proposals for cuts into open meetings, is designed to make it all transparent, Gillingham says.

"The public now sees what kinds of difficult choices council has to make every year."

The other big change to this budget process is the shift to multi-year budgeting. Gillingham believes planning budgets in four-year increments removes the problem of off-loading deficits to the next year. And the year after that.

"We are going to slay the projected deficits of next year — this year," he said.

City council finance chair Scott Gillingham (St. James) says he's determined to hold the line on property taxes. (Jeff Stapleton/CBC)

As for an orchestrated plan to "soften" the public to the idea of a rate hike, the finance chair is unequivocal.

"I am not open to going above a 2.33 per cent tax increase," Gillingham said, when asked a second time if a rate boost is hiding around some corner of city hall.

Mayor Brian Bowman campaigned last fall on a promise to keep annual tax increases to 2.33 per cent, with the cash funnelled to fixing the city's roads and transit improvements.

Yet just a few months after his re-election, Bowman himself used the threat of a property tax increase — a whopping 9.4 per cent — in a public bun fight with the provincial government over funding.

So there is that.

And Winnipeggers have seen clashes over cuts before the current budget process began this fall.

In 2016, a very public budget debate was triggered by a looming threat of layoffs and cadet reductions at the Winnipeg Police Service.

Money was found and the number of officers on the streets stayed the same.

Too early for the 'T' word?

The door swings open a little wider on the possibility of a tax increase when you canvass some of Gillingham's colleagues on council's executive policy committee.

Councillors Matt Allard, Cindy Gilroy, Brian Mayes and Sherri Rollins — all of whom chair various committees of city hall — have in recent days said it was too early in the process to say if a tax increase is required.

"Too early" is not the same as Gillingham's or Bowman's resolute "no" to taxes.

Tread just outside outside Bowman's inner circle to the deputy mayor, and you'll hear the tax-increase gate creak open just a bit wider.

St. Norbert-Seine River Coun. Markus Chambers figures there needs to be plenty of "belt-tightening" before a tax hike is brought in, but said he's hearing from his residents that they see it as compromise.

"That's what citizens are saying — 'I don't mind a tax increase if it saves my pool,'" Chambers said.

Take a bigger step outside Bowman's political huddle and the door swings wide open — not only to suspicions of a tax increase, but some genuine anger about how this "open and transparent" budget process is working.

Transcona Coun. Shawn Nason says councillors need more information to make informed decision on how, and where, to make cuts. (Sean Kavanagh/CBC)

Transcona Coun. Shawn Nason, who last week called the whole budget process "ass-backward" for not consulting with the public first, says he's also getting hammered by residents because a pool in his ward is on the list of potential closures.

Nason doesn't believe this a four-year budget process. 

He calls it a "one-year budget with a forecast," and says the raw data — information on things like the number of mobile phones and city vehicles and travel expenses, or other information that might tell councillors how and where to cut — isn't available.

Waverley West Coun. Janice Lukes figures a tax increase "will happen," but isn't enamoured with how the budget is unfolding.

She said she hears of staff across the city's bureaucracy "living on pins and needles until March," when the budget will finally be tabled, wondering if they will be part of a cut.

That's not fair, she says.

Lukes, like her colleagues Nason and Charleswood-Tuxedo-Westwood Coun. Kevin Klein, wants far more scrutiny of what the city owns, what's too worn to fix, and what should be shed because it's duplicated somewhere else.

She calls it the city's "deadwood," and believes it's time to start trimming.

Tax hike vs. 'slash and cut'

Michel Durand-Wood, who writes a blog called DearWinnipeg.com, looks deeply at the city's infrastructure and says it's hard not to believe a tax increase is lurking under someone's budget books.

But he also has an eye on the provincial Progressive Conservative government — one that has launched what he describes as several years of "slash and cut, no matter what."

Durand-Wood is convinced the city is in "dire straits" after more than a decade of no property tax increases coupled with an aging infrastructure and "unsustainable development patterns for the past 70 years."

There are really only two choices in the short term, says Durand-Wood: raise revenues or cut programs.

"Our infrastructure," he says, "is bankrupt."

Councillors have now moved into the phase of this new budget process where they take what the bureaucrats have told them  — and the public response — and start making decisions.

So far, only Mynarski Coun. Ross Eadie has thrown up his hands.

It's time for more taxes, he says.

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