Making The Smart Choice With Our Surplus
Recently, the City of Edmonton announced that the 2017 tax increase would be even lower than we expected. After final adjustments the residential tax rate is targeted at 2.7%, the lowest increase in over a decade. I’m pleased with the work administration has done to find greater efficiency in our operations, allowing Council more flexibility to save, plan and build.
This modest increase allows us to continue with important work like fixing our neighbourhoods and building the LRT. It also allows us to continue supporting those who are most affected by downturns like this through initiatives like End Poverty Edmonton and the newly approved Community Development Corporation. Overall, this budget is a balanced approach to city building.
There has been a lot of discussion around what Council should be doing with the 2016 surplus and whether it could be used to offset our tax rate lower, rather than topping up our ‘rainy day’ stabilization reserve. Here’s my issue with that proposal: the tax increase goes to cover ongoing expenditures (like staffing recreation centres, maintaining roads and fire rescue services) – so, while it makes for great politics to say we’ve achieved a lower increase, using a one-time surplus to cover ongoing expenses is simply not sound fiscal policy. In Calgary, where they used a surplus to cover an imminent tax increase, taxpayers could see an even bigger bump on their taxes next year to make it up – which means the benefit is temporary and only pushes the issue further down the road.
In contrast, we have an obligation to get our reserve back up closer to its target level. This will ensure we’re buffered in the case of a major disaster or a heavy snow year as we witnessed only a few years back. So – let’s focus on making the fiscally responsible decision and look beyond quick fixes and temporary wins.
Saving now is our best long term option.
I think this is a great idea, and a fantastic use of a surplus for sure. You are doing great work as mayor of this city, and I stand behind this decision concerning tax rates. Thank you, Mayor Iveson and all of your staff and colleagues, for all you do to make this city something to be proud of for us who live here.
Yes Sir. I agree that is the best use of our tax dollars for now. I back you on that 100%.
Fiscally responsible policy is never sexy. Glad to see we’ve got the right guy in the captain’s chair right now, and proud to be aboard the ship.
I say we put it towards developing projects and fixing the Kingsway intersection (I think you all know which one I mean)
I think it is good to top up as a reserve as long as it is well defined. Is there a specific amount that council thinks would help with any kind of disaster? This is difficult to determine, but it is part of making a savings plan and putting money aside just for the sake of putting money aside is not helpful either. A reserve, whatever the amount, would at least help to defray a substantial part of any part of a severe expense. After this well defined amount is topped up the rest should be keep on working on projects that deserve our attention, and I agree, the Kingsway LRT intersection is a disaster.
I still feel that we should use this money to develop a new shelter for the homeless individual rooms proper kitchen some kind of a work for payment program for those who are able to to work help restore their dignity by working for their housing and food. If you should choose hang on to the money and increase our Reserve fund then I feel that we should invest this in some form of a fund that would be fairly low risk that would help increase our current Reserve fund amount annually with the option to withdraw at any time as required. This is something that our condo board Corporation did to help increase our Reserve fund that was low-risk guaranteed and produced reasonably good results.