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2017 Property Tax Rate & Calgary’s Economic Forecast

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Everyone received their 2016 Property Tax bills at the end of May or first week of June. I heard from many of you that household finances are constrained and that relief would be welcomed. Around this time, on May 30, 2016, Council received a presentation of economic scenarios, the impacts of the economy on the community and the City, and an update of the City’s financial projections and emerging financial challenges during the current economic climate. We also received notice in the spring that the Provincial property tax bill, which represents about 40 percent of your total taxes, would be increasing by 10.2 percent.

As your elected representative at City Hall, I listen carefully and weigh decisions and outcomes.  I have heard Ward 6 residents’ needs for property tax relief while at the same time an increasing demand for City services, especially during challenging economic times.  Further complicating our economic pressures is that Calgary grew by 21,000 people in 2015 and is currently on pace to grow by about 20,000 more people this year.

At the May 30th meeting, Council directed Administration to report back on corporate reserve options and options for reducing the 2017 tax rate from the previously approved 4.7 percent to increments between 3.2 and zero percent. This included identifying potential service impacts to varying levels of tax rate options along with associated short and long term risks. Administration returned to report these findings at the June 27, 2016 Strategic Meeting of Council for discussion and approval.

The June 27th report builds on a series of strategic discussions with Council over the past six months.  Administration undertook extensive research, consultation and citizen engagement to better understand how the current economic climate has impacted the wider community and the City. This work found a number of changes and negative impacts that have emerged as a result of the downturn. Council directed Administration to make the one-year freeze on 2016 user fees permanent.  Council accepted the report and unanimously approved a residential and business property tax rate increase of zero percent for 2017.

It is important to recall that your property tax essentially pays for the operating budget and the delivery of services to you. A key challenge for Council was reconciling the general public support for capital infrastructure investment (for example catching up with roads and bridges construction from the last few years of high growth to ease traffic congestion), and to also support local economic stimulus. The capital budget, which is mainly funded by the gas tax and grants from other orders of government, for 2017 is currently $1.5 billion. This will, of course, trigger new operating costs.  These may include the salaries of firefighters in a new fire hall or the maintenance of a new road or interchange. Having reduced the operating budget to a zero increase, Council voted to fund the operating costs of new capital investments in 2017 with a one-time draw of $15 million from the Fiscal Stability Reserve.

For more information about how your Property Tax is calculated, options for payment and assistance programs, please visit calgary.ca/propertytax.

 
 
 

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