Homeowners are expecting a 0.4-per-cent property tax increase now that St. Albert councillors are done with their budget deliberations.
Council members seemed pretty happy with that increase, even though it wasn’t the zero-per-cent one the city had originally tabled.
All in all, the tax increase isn’t bad. But that’s all thanks to other fees the city either introduced or increased this past year.
If it weren’t for a five-per-cent electrical franchise fee and an increase to the gas franchise fee, the projected tax rate increase would be a full $1.7 million (or roughly 1.7 per cent) higher than it is, meaning the tax increase would have been 2.1 per cent.
Mayor Cathy Heron told the Gazette last week she was happy to see a small increase of 0.4 per cent for this year.
“I think we did a really good job of finding savings within our city budget and really holding the line on staffing increases. We kept it not just below the consumer price index but below the municipal price index,” she said.
But 2.1 per cent is still a surprisingly high number for a budget that supposedly holds the line on expenses wherever possible. We didn’t see the large staffing asks of previous budgets this year, nor did we see discussion around funding many of the big-ticket items in the 10-year capital plan.
There is also the question of what will happen in subsequent years when councillors no longer have new revenue from franchise fees to offset taxes. If the city cannot continue to hold the line on staffing and divisional increases into the future, this minor tax increase will be a one-time thing. And given that neither the gas franchise fee nor the electrical franchise fee has reached the maximum amount allowed by the Alberta Utilities Commission, there’s a real danger of franchise fees skyrocketing if councillors decide to avoid the bad optics of big tax increases.
Looking at the planned municipal tax requirements for 2020 and 2021, the prospect of keeping taxes low does not seem realistic. Whereas this year’s budget has a proposed municipal tax requirement of $101.8 million, similar to last year, next year that's expected to jump to $105 million. In 2021, that jumps again to $107.8 million. Those are substantial increases.
What would have been more impressive is if councillors had introduced the 0.4-per-cent increase and managed to solve some of the city’s longer term budget problems at the same time. St. Albert is still facing a serious capital funding crisis and seems no closer to a solution than it was last year. We may have postponed major capital expenditures again, but those are still coming at some point.
The 10-year municipal capital plan now contains approximately $758 million in capital investment, and the 2019 budget document warns (as it has in past years) of the significant impending shortfall. In fact, a chart included with the budget document shows that in 2020, our funding isn’t even expected to cover basic repair, maintenance and rehabilitation of existing capital assets, let alone new growth.
This city has a lot of serious budgetary issues to tackle. It’s disappointing none of those were addressed this budget season.
