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Calgary city council will settle in for five straight days of annual budget deliberations next week, with conversations set to centre around property tax increases, 30 proposed capital investments and shifting the residential/non-residential tax share.
Public submissions will kick deliberations off on Monday, when representatives from various organizations have their say on the proposed budget adjustments.
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A question-and-answer session between councillors and administration representatives by service category will follow on Tuesday. After that, council will spend the rest of the week amending and voting on various motions and budget items, before coming to a consensus.
Here’s a rundown of some of what council will be talking about:
Tax increases on the table
As currently presented, the budget adjustments would result in a property tax increase for both homeowners and business operators in 2024.
The average Calgary household, with an assessed property value of $610,000, would face a tax increase of approximately five per cent. However, this could climb as high as 7.8 per cent — an additional $16 a month — if council also approves shifting the property tax share between residential and non-residential businesses by one per cent.
The average Calgary business, with an assessed property value value of $5.2 million, could potentially see a 3.5 per cent bump in taxes — $277 a month more — pending finalization of the 2024 assessment roll.
Ward 1 Coun. Sonya Sharp has criticized the proposed hike. She argued the city needs to figure out how to “hold the line” on the 3.4 per cent residential tax increase that council approved last year, when originally passing the city’s 2023-26 service plan and budgets. That would amount to just $7 a month more for the average household.
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“Even though we need more investment in certain areas of our city, an increase to property tax is not what Calgarians need,” she said in a recent video posted to X, formerly Twitter. “Taxpayers are still being hammered by inflation and affordability is the biggest issue people are dealing with.”
Calgary has averaged a 1.19 per cent property tax increase since 2019, according to the city.
Higher spending
The city is proposing to increase the city’s capital budgets by $937 million from 2023 to 2027. This eight per cent increase across five years accounts for $511 million in adjusted costs and $426 million in new investments, particularly in areas like affordable housing, transportation infrastructure and lifecycle sustainment of existing facilities.
For 2024, administration is requesting $335 million in additional spending, bringing the city’s 2024 operating budget from $5.5 billion to approximately $5.85 billion.
Administration recently presented a list of 30 new “investment recommendations” for council to consider. The city is recommending approval for 28 of these items in this year’s budget adjustments, while the other two would be carried forward to future budget cycles.
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At a media availability earlier this month, City of Calgary CAO David Duckworth said the heightened spending is justified by results of the city’s fall survey, which indicated Calgarians have become increasingly concerned with homelessness, poverty, public safety and affordable housing.
Helping offset the burden of this additional spending on taxpayers is a $100-million surplus and a $165-million windfall created by higher-than-anticipated revenues from local access fees brought on by spiking electricity prices this year.
According to the city’s budget package, about half of its ongoing annual operating investments can be made without additional property tax impacts.
“A total of $35 million in non-tax revenues and $11 million in expenditure savings have been made available for ongoing annual operating investments,” the package reads, adding the remaining $57 million required to fund investments would come through additional tax revenues.
Residential/non-residential tax share
Council will also decide whether or not to shift more of the property tax responsibility onto residences.
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Currently, residential properties shoulder 52 per cent of the city’s tax burden, while non-residential properties are responsible for 48 per cent.
However, because there are so many more residential properties than non-residential properties in Calgary, businesses pay disproportionately more tax than households do.
The current 52:48 formula resulted in a 4.26-to-1 tax share ratio in 2023. This means businesses paid 4.26 times more tax this year than residences did for every dollar of their properties’ assessed value.
The city has projected that maintaining the status quo would result in a tax share ratio of 4.59-to-1 in 2024. The provincially legislated maximum ratio is 5-to-1 — a ratio the city warns it has a 40-per-cent chance of exceeding by 2026, due to forecasted property assessment changes.
To try and bring this ratio down and avoid provincial intervention in the city’s budgeting process, administration is proposing council approve upping residences’ property taxation share by one per cent a year for the next three years. This would result in a 53:47 split between residential and non-residential properties in 2024, a 54:46 split in 2025 and a 55:45 split in 2026.
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A one per cent difference, on its own, would result in households paying an average $4 a month more in taxes and businesses paying an average $173 a month less in 2024. That doesn’t account for other increases, though.
Ward 9 Coun. Gian-Carlo Carra said it’s time for households to take some of the burden off of businesses and create “a more balanced relationship” between residential and non-residential properties.
“Right now, we have relied extensively on the commercial base and it’s not sustainable,” he said. “We cannot be a very entrepreneurial city if more and more … of the tax responsibility falls onto the business community.”
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