St. Albert’s top staffer has tabled a zero-per-cent tax increase as a starting point for upcoming budget deliberations, and councillors couldn’t be happier.
On Monday, city manager Kevin Scoble laid out a $104.4-million austerity budget built on the rationale of no budget increases except for inflation in certain areas. It was a budget designed to impress – and impress it did.
Despite the fact that the lack of a tax increase was made possible only through the introduction of a utility fee on electricity, councillors were quick to relay their praise for the document.
“I was expecting fireworks when you said zero per cent,” Mayor Cathy Heron told Scoble, while councillors Ken MacKay, Wes Brodhead and Jacquie Hansen offered their congratulations. Coun. Sheena Hughes described it as a “bare-bones budget” and “very taxpayer-friendly.”
Proposing a zero-per-cent tax increase is without doubt an accomplishment, not to mention the nearly negligible increase to utility bills of 0.1 per cent, but let’s not forget how we got here. Holding the line on taxation this year comes as a result of a controversial electrical fee that will hit groups such as renters, schools and non-profit organizations – without which the proposed tax increase would be 1.4 per cent.
And if council wants to continue seeing proposed budgets with low-to-no tax increases, that could mean introducing more revenue-generating fees in the future.
Scoble told councillors if they want to continue to see tax impacts lower than the municipal price index (which in 2019 is forecasted at 2.6 per cent), they must look at new non-traditional growth and new non-traditional revenue.
“Failing to realize new incremental sources of revenue in the future, councils may have to consider higher tax increases and/or reductions in services and service levels,” he warned.
New revenue sources are indeed worth looking at, as long as councillors remember that most of that revenue would likely be generated by the very people whose taxes they are trying to offset.
So here’s a question council should ponder: is it sustainable to be focusing on the continual search for new revenue sources, which often come out of the pockets of taxpayers anyway, as the solution for tax relief? After all, new revenue sources are only considered “new” for one year before taxes start to rise again and more “new” revenue sources are required.
There is another solution to St. Albert’s tax problem that comes to mind: focusing on growth in our business sector and continuing to work toward and beyond a tax assessment split of 80 per cent residential and 20 per cent non-residential.
Looking at this year’s proposed budget, councillors should also remember that tax increases could actually get out of hand if they decide to move forward on one or more of the much-needed facilities they prioritized earlier this year.
In the words of Hughes: “This could be a very interesting budget.”
That’s a delicate way to put it. When councillors actually start their deliberations next month, they will do so with the knowledge that anything extra they want to approve means increasing taxes.