New council debates budget

Yearly adjustments pass with focus on taxes

Calgary city council’s annual budget talks taking place November 25 to 29 promised few surprises but still made a few much needed modifications.

Spending changes unrelated to the June flood added up to about 2400 requested adjustments to the operating budget originally approved in 2010. Requested capital budget changes totalled $292 million. All of those new or expanded capital projects can be funded through existing taxes and revenue from utilities.

Every city department’s budget was approved.

The cost to the city from the flood is currently estimated at $445 million with $182.4 million of that approved in previous meetings. Mayor Naheed Nenshi argued to council that current city finances and expected insurance payouts will be sufficient to pay the recovery costs but Calgary should press other levels of government to share the cost of flood prevention.

“I think that it is a legitimate conversation for us to have about the extent to which we start using our rainy day fund to deal with… the costliest natural disaster in Canadian history…. I think the real goal to go to the province [with] is on the question of resilience… and basically saying [to provincial officials] ‘Look if we want to prevent this from happening in the future then you guys really have to come to the table here.’ And they’ve indicated a willingness to have that conversation” Nenshi told council.

Ward 7 Coun. Druh Farrell says in an interview that she wanted the flood to dominate the week’s talks and long-term decision-making at city hall.

“Years in the future we should continue to bring up the flood. It is so tempting to want to move forward and forget the impacts of [it]” says Farrell.

Flood-related costs were not the only keenly watched issues up for debate. Farrell says that even when the conversation is about relatively minor adjustments to a pre-existing budget tension between the demand for more services and deciding who will pay for them is always front and centre.

“We can’t maintain a six per cent [tax] increase but Calgarians say they want growth or some say market-driven growth but there is no appetite to pay for it” she says.

Policy analyst Amber Ruddy with the Canadian Federation of Independent Businesses (CFIB) made a presentation to council arguing that small businesses in Calgary are burdened with disproportionately high taxes in order to pay for expanding municipal services.

“Businesses pay five times more than residents on the value of assessed property” Ruddy says explaining politicians aren’t motivated to change that structure because “businesses can’t vote.”

The CFIB says between 2000 and 2011 Calgary’s population grew by 27 per cent while its operating expenditures grew by 87 per cent. The CFIB claims most of that increase was paid for with business taxes. It is asking the city to cap the gap between business and residential property taxes and restrain future spending or risk losing businesses.

“It’s easy to say you want a ton of services when you’re not going to pay for them” says Ruddy. “What we need to have is a direct association with what people are paying and the services they are receiving.”

While the CFIB calls for reduced spending the concept is not popular with groups that rely on government largesse for survival. Former Ald. Joe Ceci presented a plea to councillors to “please maintain the city’s strong funding commitment for the FCSS [Family and Community Support Services] program and the 78 local agencies who make excellent use of these dollars.” They did including $500000 for the Calgary Poverty Reduction Initiative (CPRI) over the coming year.

“We’re pleased really pleased to see that council is firmly committed to both the CPRI and the FCSS. They both tackle poverty from a prevention framework so that’s good news for the 114000 Calgarians who live in poverty” says Darrell Howard of Vibrant Communities Calgary. Howard says her organizations understand the struggle between trying to keep taxes low in the face of numerous requests for more funding but says funding programs that prevent poverty ultimately save far more money than the programs cost offering “a terrific return on investment.”

Peter Bulkowski who often speaks publicly against long-term city development plans such as Plan It made a public submission denouncing proposals to raise taxes claiming it would harm seniors on fixed incomes.

“Those of you who intend to vote for tax increases above the CPI [Consumer Price Index]: Do you really believe that driving seniors into poverty and driving families out of the city are acceptable collateral damages to impose your vision of a world-class city? Because that is what you are doing” Bulkowski told council.

Coun. Andre Chabot told Bulkowski he had heard the same message from seniors in his ward and would attempt to avoid an increase.