City council to debate $90M in budget cuts

Calgarians will have a chance Monday to speak their minds on the city's plan to cut $90 million in spending in order to bring in a tax freeze for 2021.

Council has set aside a week for its annual budget debate and that includes a public hearing which allows residents to weigh in.

The property tax picture for year three of the current four-year budget cycle is actually broken down by city officials this year in a somewhat complicated way.

Administration is proposing an overall tax reduction of 1.66 per cent.

That translates into an increase of 0.67 per cent for residential properties and a 0.55 per cent decrease for non-residential properties.

To eliminate that small tax hike for homeowners, the city is asking council to approve a one-time rebate to bring about a tax freeze.

Freeze means cuts

Mayor Naheed Nenshi said administration has followed council's direction to not raise taxes for 2021 instead of going with a previously approved 3.23 per cent increase.

But that freeze would be achievedthrough $90 million in spending cuts.

About $46.8 millionin spending cuts are landing in administration, primarily by finding savings through more efficient ways of carrying out the business of government.

But the cuts are also about axing the annual civic census (saving $1 million annually).

The next biggest single savings will be to claw back a $10 million increase in the Calgary police budget for 2021. That money was to be used to hire 60 new officers.

If the budget adjustments are approved, they would result in the loss of 162 city jobs. That would mean 574 city jobs will have been cut from the payroll since 2019.

Nenshi said this would bring city staffing down to 2013 levels.

"Since 2013, we've added 200,000 people to Calgary. We've added two Red Deers and we are still having the same number of civil servants as we had then," said Nenshi.

"We have increased taxes by less than inflation plus growth in every year since the economic downturn and looking at a freeze this year."

Some want to cut deeper

Some councillorssaidin tough times, they want to cut deeper.

Coun. Jeromy Farkas said Calgarians expect city hall to find more reductions.

"While this is a start, I think we need to be much, much more aggressive in terms of our spending reductions, to be able to respond to what every Calgary family and business has had to do: tighten their belts," said Farkas.

He wants another $90 million cut from the budget and that could happen in what he calls non-essential areas that wouldn't affect Calgarians. He points to arts spending and communications as possible areas for further reductions.

Coun. Ward Sutherland is also looking for additional cuts. But he said it is getting challenging to find significant areas to cut.

The city has reduced spending by nearly three quarters of a billion dollars in recent years so the low-hanging fruit has already been picked.

"People need to be reminded that between police, fire, transit and roads, it's basically over 83 per cent of our entire operating budget. So the ability to cut big numbers is diminishing every year," said Sutherland.

Balancing act

Nenshi is more blunt about the prospect of finding big cuts without affecting the services Calgarians expect from the city.

"We're already seeing concerns about roads maintenance, about parks maintenance," said Nenshi.

"You want the bigger cut to even below the lowest taxes in the country? Tell us where to cut and see if you can get eight votes."

In past years, councillors have offered few specific ideas for additional reductions except for across the board cuts that administration would be forced to implement.

Council has typically rejected those because of the impacts that would be felt in areas like transit, the police and the fire department.

More rebates possible

Once council settles the municipal tax rate and budget for 2021, it is expected to turn its attention to finding money for rebates to help property owners who will be adversely impacted by this year's land reassessments.

Some downtown properties are expecting to see small drops in value while hotels and motels are projected to see a 30 per cent drop.

Administration said those reductions will result in property taxes going up significantly for properties that have seen increases in values. These include some types of retail properties.

Large warehouses are looking at a potential 25 per cent tax increase next year due to their higher assessments and that shift in the non-residential tax burden.

"I think that we're going to have to look at some sort of a rebate for those businesses in this year because you don't want to just pile on with what a difficult year they've had," said Nenshi.

"But at some point, we actually have to let the market work."

It's a line that's been used by several council members in recent years as one tax rebate after another have been handed out to blunt the impacts of what they call a broken tax and assessment system.

The mayor said any changes to that system can only be made by the provincial government.