4 years of 3.9 per cent tax increases to maintain Edmonton's services proposed in draft budget

After years of below-inflation rate increases, Edmontonians could be paying nearly four per cent more for the next four years in property taxes.

Administration unveiled the proposed four-year operating budget Thursday, which sets out the plan for how the city plans to fund the delivery of services and what the expected tax rates would be.

The budget is the second of four fiscal plans that council will be discussing for the next month, with the $7.75 billion capital project budget tabled earlier this week.

• Edmontonians uncomfortable with tax increases, want better snow control: city surveys
• City council trying to stretch $7.75B proposed budget to fit needs of Edmonton

Stacey Padbury, the city's chief financial officer, called the operating budget "prudent" and "thoughtful" as it considers the impacts on every Edmontonian.

According to her, the budget balances delivering the services residents rely upon while keeping user fees at recreation centres and other city facilities "manageable" and only a "modest" property tax increase.

"We are all experiencing inflation and economic uncertainty, whether it's heating our homes and putting gas in our cars or heating a library and fuelling a city fleet," Padbury said.

"That's why we've prioritized what matters most: delivering the programs and services that Edmontonians expect while minimizing the financial impacts wherever possible."

Wage increases for employees, rising interest rates for already-approved infrastructure projects like the LRT expansions and surging fuel prices are driving the need for the series of tax hikes for 2023 to 2026, the city says.

PROPERTY TAX INCREASES

In 2021, property taxes were frozen to help Edmontonians respond to the challenges of the COVID-19 pandemic. Since 2018, the five-year average of municipal property tax increases was 1.9 per cent.

If the proposed budget passes unchanged, the tax levy increase in 2023 will result in Edmontonians paying around $718 for every $100,000 of their assessed property value — approximately $27 more than in 2022.

"For a number of years, we have been carefully watching the impact of the budget and trying to come in lower than inflation because we know and understand the impact that has on Edmontonians," Padbury said.

"But in an environment of increasing inflation, to continue to come in lower than inflation would ultimately impact service delivery," she added. "So this is the level that we needed to levy in order to maintain the existing service levels, the current levels of service."

• Sohi has 'zero appetite' for redirecting neighbourhood renewal funds to maintenance shortfall
• City recommends shrinking new Lewis Farms aquatic centre to save $58M

To help keep taxes as low as possible, Padbury says the city has directed departments to maintain services within existing budget levels and to either lower or have no new funding asks for the upcoming budget cycle, in addition to implementing hiring freezes.

The city also believes that continued growth in the sale of Edmonton properties will expand the tax base to offset the need for further tax hikes.

City savings for the next two years will be used to further offset the need for any tax or user fee increases for transit and recreation centre users as those services return to pre-pandemic levels, Padbury said.

Around 2.1 per cent of the proposed tax increase is to maintain existing service levels and the $7 million increase to the base police budget results in about 0.4 per cent.

FURTHER INCREASES?

City officials anticipate annual revenues and expenditures to range from $3.2 billion in 2023 to $3.5 billion in 2026.

That includes funding $14.3 million over four years to grow existing services and $92.8 million to bring the Chinatown and Downtown Vibrancy strategies to life.

The city's plan to tackle derelict properties will receive more than $1.1 million in 2023 and both the Missing and Murdered Indigenous Women and Girls strategy and Truth and Reconciliation Municipal Response Plan would receive around $2.7 million over the budget cycle.

Some council priorities like enhancing snow and ice control, 24/7 REACH crisis diversion teams, having after-hours support for Edmonton's night economy, and affordable housing and homelessness prevention strategies are not currently funded under the proposed budget.

• How Edmonton plans to deal with snow and ice this winter
• Nearly 400 crashes reported to collision centres during Edmonton's first snowfall

Should council want to improve snow clearing, the city would need to find approximately $55 million for the next four years or further increase taxes.

The city's public washroom strategy and transit safety stabilization program that provides Community Outreach Transit Teams are both unfunded as well, with the two programs requiring $4.7 million and $7.3 million, respectively.

On-Demand transit is also unfunded by the draft budget, requiring another $11.8 million over four years.

"The city is in good financial shape going into the next budget cycle," Padbury said. "We've made careful and difficult decisions."

The operating budget will be presented to city council on Nov. 14.

With files from CTV News Edmonton's Jeremy Thompson