City budget deliberations expected to focus on cuts

With a tax freeze on the table and a tighter budget than many councillors have seen yet, this city budget won’t be about new initiatives. It will be about how deep to cut. A new business advocacy group, Prosperity Edmonton, is calling on city council to freeze taxes, saying increases are driving business from the city and can’t be sustained while the economy continues to sputter.

Coun. Mike Nickel said he supports that call, while Mayor Don Iveson said he wants to hold the increase to the projected rate of economic growth.

That would be an estimated 2.7 per cent for 2019.

That’s tough because council has already agreed to new initiatives and police funding that require a two per cent increase. At the same time, the city faces increased energy prices and other costs. Councillors and staff will need to cut and cut again to balance a budget.

Council looked glum as it got the update at a meeting Tuesday.

Deputy city manager Leanne McCarthy said her team will report to council on the cuts they ’ve made to date, and the deeper cuts they ’re contemplating.

She said some of those cuts are significant enough to need council approval.

That’s part of an initiative council started after the last four-year-budget — a full-scale, program by program review with an outside expert jury.

“I don’t know what happens to something like the Lewis Estates Recreation Centre, which is a huge ask,” said Coun. Ben Henderson.

LITTLE FLEXIBILITY

West Edmonton residents assumed the Lewis Estates Recreation Centre would get built in the next four years after council funded the design. But Edmonton still doesn’t know how much infrastructure funding it can count on from the province for the next four years.

The city also needs to cover its share of the 50 Street railway crossing upgrade, the Yellowhead Trail project, the west LRT and promised upgrades along Terwillegar Drive.

Prosperity Edmonton says taxes have already gone up enough.

In 2016, businesses and other non-residential property tax holders paid $695 million to support the city budget.

Ten years prior, they collectively paid $310 million, including both property tax and the business tax.

That increase is unsustainable considering the number of businesses in Edmonton only grew by 11 per cent in that time.

A TIPPING POINT

“It’s a tipping point,” said Prosperity Edmonton spokesman Chad Griffiths, a commercial real estate broker, asking council for a freeze.

They want administration to outline various options for what that could look like.

“We just think they need to find savings.”

Henderson said it won’t be easy to find cuts.

Edmonton did that in the 1990s, enforcing a series of zero increase budgets.

It ended up costing taxpayers more on items like neighbourhood renewal, he said, because infrastructure got so bad the roads had to be completely replaced.

Iveson said he thinks council can hold the increase to the rate of economic growth for several years. One of the major cost drivers is salaries and he’s hoping Edmonton will hold the line in new deals with its major unions.

Contracts run to the end of 2018.

I don’t know what happens to something like the Lewis Estates Recreation Centre, which is a huge ask.