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Yes, Calgary, a long-term property tax cut is possible

Author: Paige MacPherson 2016/07/04

This op-ed was originally published in the Calgary Herald on July 1, 2016.

By: Paige MacPherson

Calgarians are finally getting some relief. City council approved a property tax freeze for 2017 – well, sort of. It’s actually a 1.5 per cent increase, but they’re dipping into the (hefty $370 million) fiscal stability reserve to make up the difference. It’s not perfect, but after 10 years of property taxes increasing at almost three times the rate of inflation, it’s something.

To be clear, a property tax cut was completely achievable. What we have is not even a long-term property tax deep freeze; it’s more like the chilly breeze when you open your window on a winter day. But it’s something. (Photo: Calgary City Hall -- Micheal J/Flickr/Creative Commons)

What’s troubling is that city administration has said that the 2017 freeze could mean a larger increase in 2018. Perhaps the 1.5 per cent increase on top of the approved 2018 rate, currently set at 4.7 per cent.

Conveniently for councillors and their newfound respect for taxpayers, 2017 also happens to be an election year.

The reality is, city council doesn’t have to raise your taxes in 2018 either. Voters should hold council to the very feasible opportunity to continue the freeze, or to implement long-term tax cuts.

All of this is possible without dramatically impacting services, and the 2017 freeze proves that.

Rewind to last week: Mayor Nenshi was urging “transparency” and “honesty” from councillors on what a 2017 property tax freeze would mean.

“If you really want to cut, then you have to be honest to people and say these are the services we’re going to cut,” Nenshi said. Reportedly Mayor Nenshi said it would be “almost impossible” to make cuts without touching fire, police or transportation.

The comments were unquestionably discouraging – yet didn’t reflect reality, as it turns out.

Fast forward to Monday evening: Mayor Nenshi explained the anticipated cuts that got them the freeze.

“Council was comfortable that there were some things around a little less mowing of low-use play fields, for example, or a slightly smaller growth in the number of hours of Calgary Transit, that sort of thing, in order to get there,” said the mayor.

Less mowing of low-use parks? Smaller growth – but still growth – in Calgary Transit hours? Where are the service cuts? The slashing and burning of police, fire or transit? Bueller?

It was reminiscent of the story former Calgary mayor and Alberta premier Ralph Klein told Don Martin for his biography King Ralph: “When the budgets tightened around city [of Calgary] parks operations, staff would invariably threaten to shut down the outdoor swimming pools on summer long weekends. ‘When we gave them the go-ahead, the bureaucrats would duck [back down]’.”

What’s abundantly clear is that despite all the rhetoric, getting to a property tax freeze didn’t require dramatic service cuts. And a long-term property tax freeze or cut won’t either.

It’s not so unbelievable that a city could deliver long-term property tax relief. The City of Winnipeg had a property tax freeze in place for 14 years.

In the week leading up to Monday’s freeze decision, several ideas for spending reductions entered into the public debate.

Five per cent rollbacks for city employees in upcoming union negotiations would ostensibly cut 2017 property taxes by an estimated 2.7 per cent. Zero per cent wage increases would achieve a property tax freeze. From 2014 to 2015, City of Calgary spending on salaries, wages and benefits increased by 6.1 per cent despite inflation being only 1.2 per cent and population growth being 2.4 per cent.

It was suggested that council should privatize the maintenance of city golf courses, or sell them altogether. A University of Calgary economist suggested the social development budget be looked at, as it should be provincial activity.

We at the Canadian Taxpayers Federation suggested the city scrap its policy that forces spending on public art projects whenever major infrastructure projects are built, reform gold-plated pensions for councillors and new city employees, and conduct a line-by-line spending review. And absolutely, positively, council should not blow money on an Olympic bid or corporate welfare for a professional sports arena.

Council discussed the property tax freeze behind closed doors, so we don’t know if any of these options made it into their conversations.

Ultimately, the 2017 property tax ‘freeze’ was positive, but the measures taken were a Band-Aid solution. The good news is that a long-term property tax freeze, or cut, is completely doable. All it takes is a little belt-tightening – something Calgary businesses and families have been doing for a while now.

Paige MacPherson is Alberta Director of the Canadian Taxpayers Federation. 


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