Managing Growth, Managing Debt

This past December’s City Council approval of the budget adjustment for 2017 included the lowest tax increase in the past 10 years. How is this possible with increasing inflation and the cost of almost everything going up? Increasing prices and the desire to keep municipal taxes down meant that there had to be cuts to some programs and services, an increase to the debt, or a combination of both.

In the three-year budget that City Council approved in December 2015 for 2016-2018, they planned for a steady increase in the tax levy year over year: 3.4% in 2016, 3.4% in 2017, and 4.8% in 2018. At the time of the budget approval at the end of 2015, there was a Provincial government that had only been in place for six months and a newly elected Federal government. Funding from these other orders of government had yet to be confirmed and Edmonton City Council was making educated assumptions that funding would remain about the same as it had in the past. In 2016, the other orders of government made changes to funding for municipalities and the City of Edmonton had to respond to these changes. Two major changes for our city were the extension of the Municipal Sustainability Fund, a provincial program for municipal infrastructure, and a new promise by the Federal Liberals to increase grants for infrastructure – both would impact the City of Edmonton’s budget and priorities dramatically.

Since the approval of the three-year budget cycle, Edmonton City Council has approved other changes that will impact our tax bills. The most recent example was this week’s approval to borrow $510 million for upgrades to Yellowhead Trail. The cost of borrowing for the City of Edmonton’s portion of the $1 billion project will directly impact the taxes paid by every resident of Edmonton over the next 10 years by 1.76%. This project alone will increase every tax bill by about $40 just to pay for upgrades to a 25 kilometre section of the road stretching across the width of our city.

When I heard about this decision by City Council’s, I was shocked at the complete lack of consultation with Edmontonians. How did they know if residents thought this is a good choice?

For every budget, there is a statutory public hearing where the public get to voice their concerns over potential tax increases. At public hearings, residents also have the opportunity to advocate for the projects and programs they would like to see funded in return for an increase to their tax bill.

In this case, the item and report was posted publicly on the City of Edmonton website five days before the Council decision. That doesn’t give residents much time to understand the impacts of the decision, ask questions, learn more, and share their feedback with their Councillor. It also does not give members of Council much time to reach out and get input from their constituents. Ultimately, this project will have positive economic impacts for our city through the construction phase and will benefit many daily commuters. Big infrastructure projects like this do need to be funded. But residents need to have a say in the process.

Debt management is a big responsibility that our City Council oversees on behalf of all Edmontonians. We elect our representatives to make decisions about spending and investment on our behalf and we expect them to have our best interests in mind. Council has to make these decisions within the rules of borrowing set out within the Municipal Government Act and in accordance with the City’s own policies and plans for debt management. These rules are all good checks and balances for decision making at City Council.

In addition, I would like to see more opportunities for residents to have a direct say in how major decisions around our city’s budget and debt is managed because we are the ones who are impacted by service changes and the tax increases. As your City Councillor, I will advocate for clearer communication with residents about financial decisions and ensure citizen feedback is gathered so we can make informed decisions on behalf of Ward 5 and all Edmontonians.

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