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EDITORIAL: Tax folly


Why is our City even contemplating a tax increase when significant numbers of residents have lost their jobs and many local businesses are struggling to pay rent?

Yes, the fallout from the COVID 19 crisis is no one’s fault, and municipalities are feeling the squeeze too. Councillors wondering what action they can take to ease the pressure on taxpayers need not look far to find some answers. They can take a page from local businesses and homeowners who are scrambling to make ends meet when cashflow is drying up. They’ve been forced to determine what they really need and what they can do without, at least for a year or two, until things begin to return to normal.

On Monday, councillors discussed ways to soften the blow of an impending 2.5-per-cent property tax increase proposed by administration. They will decide May 11 whether to support Coun. Sheena Hughes and reduce the residential increase to one per cent and/or agree with Coun. Ken MacKay who would like to reduce the burden on business by reducing the amount they bear of the overall total. Both approaches are wrongheaded. We shouldn’t be pitting residential taxpayers against business. The right course of action is reducing, or at least not increasing, taxes for everyone. If just about every other municipality in the region can do it, so can St. Albert.

Council will need to take a holistic view over the longer term. The impact on municipal finances from throttling down our economy for several months will not be a one-year fix. Whatever it decides now will have a cascading effect on subsequent years. Cutting taxes in one year needs to be considered in the context of what that will mean in the years ahead. Will it require a much higher increase next year, or two years down the road? Would it not be a better idea to make more significant changes to operations in order to avoid the need to raise taxes in years two or three? Businesses all over the world have been forced to restructure their organizations to operate at a lower cost and they won’t be going back to their former ways. Why can’t our City do it too?

The province has offered some relief to the education portion of our property taxes, thankfully. A planned 3.4-per-cent increase will not go ahead this year. Administration has helpfully pointed that out to councillors but, we would hope they resist the temptation to take advantage. A provincial government operating at a huge deficit will be forced to return and collect it in the future. Better to leave it some room now.

Residents, businesses and non-profits are all hurting – and they are all having to do more with less. The city should take advantage of the crisis and imagine ways to do things differently. What programs can be cut until further notice, and what services are essential to St. Albertans? Council needs to show us that work has been done before they even think about offering up a tax increase of any kind.