Quote:
Originally Posted by Cowboy89
Fully agree with that point. The province can put it's foot on the city's throat and not vice-versa. But once again this is something that needs to be explained as a rationale as to why there was such a big tax increase at the municipal level, not trying to pretend that somehow there wasn't a big tax increase specifically at the municipal level.
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I think he attempted to do this - relentlessly, but the message was drowned out by 31%!! 31%!! 31%!!
People never characterize province's increase in revenue as "tax hikes" when hey derive, for example, a year-over-year increase of 12% (2011-2012) in revenue from personal and corporate taxes. Theirs grows naturally with population and the economy. Our tax system requires a manual mill-rate adjustment because it's revenue neutral and is on a shifting assessment base. It's tough politically every single year.
Broadly, it's hard to wrap your head around our convoluted property tax system, revenue neutrality tax room and all its nuances. But I do think the Mayor did try to explain as best he could how property taxes work, the issue of tax room - why it was taken, and what it is used for:
From:
http://www.nenshi.ca/straighttalk
What is this conversation about “tax room” and the famous $52 million?
The City’s share of the overall property tax has increased because the City has taken “tax room” left by the Province to fund capital expenditures that used to be funded by the Province.
What is tax room?
Remember that half of your property taxes go to the Province for education. When the City sets its budget in November for the following year, it sets the tax rate to derive the amount of revenue required to meet both its operating needs and the Province’s needs for education. The problem is that the City has to guess how much the Province will require for education because the Province does not set its budget until the following spring. In the past 3 years, the Province hasn't taken as much of the tax increase as we thought they would, leaving a revenue surplus, which is called “tax room”.
City Council has a policy to use tax room to offset the shortfall in the capital budget caused by lack of funding from the provincial government. When the City does this, the City is increasing its share of the total property tax collected, but it is NOT using that money to increase the operating budget.
Projects funded by tax room include:
2011: $42 million annually created the Community Investment Fund, which is funding the new Central Library, 4 new regional recreation centres in NW and SE Calgary, 3 new library branches and maintenance and upgrades to parks, arenas, swimming pools, and other recreation facilities across the city.
2012: $10.2 million annually was distributed to five areas: $2 million for sidewalks (replaces the 50% resident share for sidewalk replacements), $2 million to improve transit system reliability, $2 million for targeted traffic congestion solutions, $2 million for lifecycle maintenance of City buildings, and $2.2 million for enhancing community facilities like community halls.
2013: $52 million for flood recovery (repairing things like bridges, roadways that the City will not recover from insurance or provincial or federal disaster recovery programs). Future allocation of this annual tax room amount is yet to be decided by Council.
The key point here is that tax room is not used for the operating budget; it is explicitly used only for capital projects and debt reduction – the things the Province normally funds, but has been cutting its funding recently. None of the projects listed above - projects which citizens have told us are important investments - would have occurred if Council had not used the tax room to fund them.