Proposed city budget calls for 3.9% property tax hike in each of next 4 years
City of Edmonton administration is recommending annual property tax increases of 3.9 per cent in each of the next four years in a proposed operating budget for 2023-26.
The city posted the financial blueprint Thursday.
If approved, Edmonton homeowners would pay about $718 in property taxes for every $100,000 of their assessed home value in 2023, up $27 from this year.
The city's proposed operating budget for 2023 amounts to $3.2 billion in spending.
The city lists a number of financial pressures on its finances, including wage increases for city staff, higher debt servicing costs and interest rates for new capital projects, higher energy prices, higher fuel costs and funding for the Edmonton Police Service through an updated formula.
"There is a great deal of uncertainty surrounding inflation forecasts as the pace and scale of price pressures easing are unclear," the budget document says.
Stacey Padbury, the city's chief financial officer, said for a number of years the city has tried to keep tax increases lower than inflation.
"To continue to come in lower than inflation would ultimately impact service delivery, so this is the level we needed to levy in order to maintain the existing service levels," she said. "This time around this budget is really focused on maintaining those service levels."
The finance department is proposing to use money from the city's reserve fund next year to make up for a drop in revenues in transit and recreation facilities during the pandemic.
Transformational projects
About 1.6 per cent of the tax increase is going toward paying off debt from previously approved capital projects in various stages of construction.
Those include Valley Line West LRT and the Capital Line LRT South Phase 1 , Yellowhead Trail freeway conversion, redeveloping the Blatchford site and the Lewis Farms and Coronation recreation centres.
About two-thirds of the large-scale projects are funded with federal and provincial money, Padbury noted.
Coun. Andrew Knack said he thinks a 3.9 per cent hike is reasonable, considering how low taxes have been, especially in the past two years.
"And we did that in a very meaningful way to recognize the impacts of the pandemic," Knack said in an interview Thursday. "But as we look forward, we are dealing with the same cost pressures that everyone is dealing with now -- businesses, households and the impacts of things like inflation."
First carbon budget
Also released Thursday was the city's first carbon budget.
Edmonton has set targets to reduce greenhouse gas emissions — using 2005 as a baseline — by 35 per cent by 2025, 50 per cent by 2030, and be emissions neutral by the year 2050.
Although the city has undertaken several initiatives to reduce emissions, the carbon budget is forecasting the city will miss those targets.
Council will review the proposed operating budget at a public meeting Nov. 14.
The city released its proposed $7.75 billion capital budget two weeks ago.
Public hearings on both capital and operating budgets will take place at city hall Nov. 28 and 29 before city council begins deliberating the finances in earnest in early December.
