A devastating one-two punch is hammering Edmonton city council’s plan to keep raising property taxes.
The first blow came in a biting series of reports on overspending and inefficiency from the Edmonton Chamber of Commerce’s municipal budget task force. The second comes from council’s own efficiency expert, Coun. Tim Cartmell.
City council will soon debate its 2019–2022 budget. Annual tax increases are on the table, but here are the Top 8 arguments councillors should say use to say no to property tax increases:
- The city’s spending increases in the past decade have greatly outstripped inflation or population increases. From 2006-16 our population increased by 28 per cent. The cost of living increased 23 per cent. But the city’s operational spending went up 103 per cent and city tax revenues went up 137 per cent, the chamber said.
- The city should cut spending, just like local businesses and families have done. As the chamber puts it: “Since the start of the recession, business owners have had to make difficult decisions to survive, including reducing wages, cutting hours, freezing hiring, and even laying off staff. Alberta-wide, wages today are roughly the same as they were three years ago. In Edmonton, overall municipal government staffing levels have increased, and the last collective agreements gave raises that amount to more than double the wage growth of the average Edmontonian.”
- Businesses are starting to drown. There was a 124 per cent increase in business property taxes from 2006 to 2016, says the chamber, plus other new taxes as well: “Property tax increases, on top of increased taxes, fees, and other costs from all orders of government, are pushing many Edmonton businesses to the breaking point.”
- There’s too much overlap, waste and duplication in providing city services. One cost driver could well be that different arms of the city are doing the same work. For example, Cartmell says, the city has a city branch set up to engage with citizens and a transportation department to build safe roads. So why does the city also have a Vision Zero staff and initiative to engage with citizens and promote safe roads?
- A huge funding crunch is coming. The provincial government’s infrastructure funding program to towns and cities like Edmonton runs out in 2021. At the same time, a federal parliamentary budget report estimates public debt in Alberta will exceed $100 billion by 2021 and $1 trillion by 2051. Given a coming cut in provincial grants — which Cartmell expects will happen no matter who takes power next election — the city has got to get its priorities and spending under better control.
- The city has failed to privatize in order to save money. From 2013 to 2018 there was a 41 per cent increase in the net operating costs of the city running community recreation facilities, the chamber says. But why not have private organizations like the YMCA, which already runs some local recreation facilities, take over operations of some of these facilities? “These (YMCA) centres are self-sufficient and do not require any form of city subsidy.”
- The city is over-staffed. While our population has grown 28 per cent in 10 years, city staff grew 44 per cent, the chamber said. We should follow what the city of Montreal did and hire only one new person for every two that quits or retires (not including fire or police services). “Even if Montreal’s ‘hire one for every two’ rule was only used for two years, followed by zero net growth for two years, this would reduce staff by five per cent.”
- The city is too focused on social engineering. The most expensive example is LRT. As city council should know from the Metro Line fiasco, it’s plenty hard enough to build a rapid transit on time and on budget that actually works to move people safely and efficiently. But with its new Valley LRT from Mill Woods through downtown to the west end, the city made the primary goal not transportation efficiency but getting transit oriented development along the line. Will this investment actually pay off? And why not just focus on moving people fast and inexpensively, Cartmell asks? Why not now spend the $2 billion for the west LRT leg on permanent busway lines to the west, as well as to the northwest and southwest corners of the city? “I would submit we could build bus rapid transit to three different corners of the city for half that money,” he says.
Cartmell and the chamber of commerce make compelling arguments. Many citizens and businesses are fed up with tax increases. The only remaining question is whether city council will listen and get serious about cost cutting for the first time in many, many years.