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Ward 4 News: Using MPI to Guide Property Tax and Service Rate Increases

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Ward 4 official websiteOne of my life mottos is “live and learn”. And, after the 2015-18 Budget Review this is what I have learned. I believe that Council was open to hearing about my plan to lower property tax and service rates from 4.7% to 3.3%. However, in order to get more votes, I needed to be more convincing in my arguments. I needed to focus more on the merits of using the Municipal Price Index (MPI) to guide our budgetary decisions. So, in the spirit of wanting to make a difference going forward, here is some straight talk on this City of Calgary generated price index.

The MPI was specifically created to help municipalities project their future costs. Other indexes, such as the Consumer Price Index (CPI), Producer’s Price Index (PPI), and the Gross Domestic Product (GDP) deflator, do not take into consideration the specific inflation rates for products and services purchased by a municipality the MPI. The City of Calgary’s MPI rate is currently set at 3.3% but yet we voted to increase property tax and service rates by 4.7% - per year – instead.

So, where did this extra 1.4% come from? Basically, the City of Calgary used the MPI rate and added 1.4% in order to account for growth. However, my point is this. The MPI was developed to speak to aspects of growth already and budget talks should have began at this rate. Then, throughout the review, administration could have articulated why funding above the MPI rate was required and council could approve or not approve. Instead what occurred was that council was provided a rate already above MPI and was tasked with trying to find cost reductions from there. In my mind council does not have the background knowledge required to go through departmental budgets line by line to find cost savings and this backward process does not have the best interests of our citizens at heart


 


 
This content represents the personal views and opinions of the Ward Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.
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