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.