'Disappointed': Why some councillors are upset over Edmonton's 6.9 per cent tax hike

Ward tastawiyiniwak Coun. Karen Principe said she needed a few minutes to compose herself after her peers on Thursday passed the city budget with a 6.9 per cent property tax hike.

Going into deliberations, city administration was calling for a 6.4 per cent property tax increase. By the time council was done crunching numbers that number rose half a percentage, with the total operating budget at $3.93 billion and the capital budget at $2.3 billion.

The city says an average homeowner can expect to pay $816 for every $100,000 of their assessed value, which means if your house is worth $400,000, your property tax bill will be $3,264. Principe and Ward pihêsiwin Coun. Mike Elliott were the lone councillors voting against the hike.

“No doubt I’m disappointed,” Principe said. “I was hoping to see a tax decrease, not an increase. I was really hoping this council was going to make some tough decisions and say ‘no’ and have priorities and stick with them.”

Visibly upset, Principe told reporters she had proposed several reductions in the budget — delaying demolition of the Argyll Velodrome, pushing off completion of an integrated control centre for Edmonton Transit Service, halting plans to upgrade bike racks on buses and upgrade passenger counters on the LRT, as well as pulling money away from vandalism control. She additionally proposed pulling money from an unknown risks fund and from the Epcor dividend and putting it towards the tax levy.

Collectively, those changes would have slashed just shy of $29 million from the city’s expenses, though it would also have meant the city was walking away from nearly $4.5 million in federal funding for capital projects. Principe’s amendments would have amounted to a 0.1 per cent reduction in the property tax hike. However, they were all shot down.

“There are many things coming forward that we are likely going to have to say ‘no,’ to try to control the debt and deficit the city’s facing,” she said later. “Some of my colleagues had commented that some of the motions I made wouldn’t actually impact the tax levy, however it would be addressing some of those (budget) variances and ultimately it actually can affect the tax levy.”

It wasn’t supposed to be this way — council went into the four-year budget in 2023 with a plan to keep tax hikes at or below 5 per cent, but that plan was derailed by runaway inflation following the COVID-19 pandemic, combined with rapid population growth.

Rutherford behind the lone cut and the tax hike

Council’s lone approved reduction was pulling $438,000 from the Old Strathcona Public Realm Reserve, which was put forward by Ward Anirniq’s Erin Rutherford.

But Rutherford also proposed the lone increase to the tax levy looking for the city commit to steady funding for Explore Edmonton — an $11-million ask which passed 8-5, with Principe, Elliot, along with Couns. Reed Clarke, Thu Parmar, and Mayor Andrew Knack voting against it.

Knack told reporters his preference would have been to use funding from the Financial Stabilization Reserve (FSR) this year and commit to a funding model in 2027. However, chief financial officer Stacey Padbury repeatedly warned council throughout the week that the FSR was already well below its minimum balance and pulling too much from it would jeopardize the city’s long term financial stability. That, in turn, prompted Rutherford to propose drawing the funding for Explore Edmonton from taxpayers. The city says Explore Edmonton brings in $29 to the economy for every $1 of investment.

“We have to be transparent with Edmontonians that if is this is really important, we have to be able to stand behind it,” said Rutherford. “I don’t love that we ended up increasing the tax levy, but I think it is a justifiable expense at a time when we know we need to kickstart our economy.”

A little creative accounting helped the city find money for several projects without stiffing homeowners — at least not immediately. Councillors voted unanimously to direct nearly $3 million from the Epcor dividend towards Dedicated Accessible Transit Service (DATS) and to borrow $25 million to purchase 25 new buses. Council also dipped into the FSR to put money on the table to finish expansion of Whitemud Drive out to Enoch Cree Nation and opted to use fine revenue to pay for a new dedicated traffic safety unit.

In addition, council pulled $2 million from the city’s fund for insurance settlements to retain a COVID-19 era transit cleaning program, which Rutherford said put her over the edge.

“I think it’s ill-advised and that was kind of the straw that broke the camel’s back on whether I could even stand behind and support this overall budget,” Rutherford later told reporters.

“I chose in the end to be a team player but I feel like I put my council colleagues on notice that I can’t continue to do this year-over-year if we’re not going to change fundamentally how we budget, and have some really big conversations about restraint and priorities.

“Our CFO was very clear in stating that if we continue to deplete our FSR, at some point at the only option you will have to turn to is tax levy. The report was clear as day — $38 million (in structural deficits) we still need to grapple with for the four-year budget.”

ebowling@postmedia.com

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