Taxpayers Federation to Present 2005 Pre-Budget Brief to Executive Policy Committee

CTF submission

WINNIPEG: The Canadian Taxpayers Federation (CTF) today presents its recommendations on the
2005 Preliminary Operating Budget Estimates to the City of Winnipeg's Executive Policy Committee (EPC).

The CTF's pre-budget brief highlights the positive impact of past property tax relief and why City Hall needs to adhere to its core competencies and curb spending in non-priority areas.

"Even though the property tax rate has been frozen for the past two budgets, the City is going to enjoy $3.85 million in new property tax revenue in the next fiscal year," stated Provincial Director Adrienne Batra. "With lower interest rates and a competitive real-estate market, Winnipeg's assessment base is growing and the small tax cuts offered in the past have not had a negative effect on revenues, in fact it has been quite the contrary," added Batra.

The CTF will present these main recommendations to EPC:

• The two-point reduction in the business tax for the downtown are should be extended to all Winnipeg businesses.
• Phase out the remaining 7.75 per cent business tax over a four-year period so that continued growth in business tax revenues offsets the staggered tax reductions.
• To ensure Winnipeg's competitiveness the CTF recommends a 2 per cent reduction in property taxes to augment tax cuts given in previous years. Tax reductions can be realized through administrative savings or a freeze on specific expenditures in non-priority areas.
• The City continue to expand the Alternative Service Delivery Model
• To continue financing high priority spending areas such as debt servicing costs, fire and police services the CTF recommends the city reduce spending in low priority budget envelopes to a comparable extent.

The CTF commends Mayor Katz for keeping his commitment to reduce and eventually eliminate the business tax, but there are concerns with this year's tax cut only going to downtown businesses. "Picking winners and losers in the tax cut game is not sound economic or public policy; this strategy puts those businesses operating outside of the downtown core at a significant disadvantage as they will essentially be subsidizing the tax reduction," concluded Batra.