Calgary councillor wants drastic $100M cut to city budget

It's an understatement when Coun. Evan Woolley says "our tax system is complex."

Faced with a $250-million problem, Woolley has rolled up his sleeves to find a way to deal with the fallout from depressed downtown property values that are putting the squeeze on business property owners outside the core.

His solution is multi-pronged.

First, he wants to find $100 million in cuts to the 2019 civic budget. Yes, for the budget year that is already nearly three months in.

Second, he wants to shift $82 million in property taxesfrom non-residential accounts to residential ones. That means tax hikes for homeowners.

Third, he wants to take $71 million from the city's rainy day fund and $54 million from a new account set up by city council to pay for four major projects, including the BMO Centre expansion and a potential new arena, and use that cash to give residential customers $125 million in rebates over the next four years.

That final measure would help mitigate dealing with the costs of the tax shift from non-residential to residential accounts.

Businesses need help: Woolley

Woolley suggests it is imperative that council act to help protect business property owners against large tax hikes.

"If we don't do anything now, the structural problem with our downtown will continue. Today's problem is not going to be solved without undertaking this proposal to share the burden of the significant shift amongst residences, businesses and the City of Calgary's budget," said Woolley.

If all of his proposed measures are adopted, Woolley said, the share of taxes paid by business property and residential property owners would be more properly aligned.

However, he's not offering any suggestions on where to find $100 million in cuts to this year's civic budget.

The proposal would also add more than $300 to the annual property tax bill of a median-priced house although that would be offset for the next four years by $250 in rebates.

His motion, which is expected to be discussed at a city council meeting next week, seemed to catch several of his colleagues off guard.

Other councillors raise questions

Coun. Jyoti Gondek recently floated the idea of the city shifting some of the tax burden from non-residential property owners to residential accounts and then paying rebates to homeowners.

She said a number of council members have been working this week on potential solutions to the business property tax problem. Instead, Woolley developed his own proposal.

"I think it's a little bit unfortunate that this was somehow a briefing for media rather than a briefing for his colleagues. That would have been great," she said.

Gondek is skeptical that $100 million in budget savings can be found in a fiscal year that's already almost one-quarter done.

"We're trying to keep businesses from going out of business and keep people from losing their jobs. Now we're saying, 'Yeah, but let's do that to City of Calgary employees. Let's not worry about them.' So, we've got to strike a balance."

Major projects threatened?

Coun. Ward Sutherland shares the concern that finding major budget savings in this year's budget may not be possible.

But he's also concerned that if money is taken out of a new fund for major projects, it could jeopardize the chances of completing all of the projects.

He points out that other partners need to be involved in the projects: the BMO Centre expansion, a new arena, fieldhouse and the Arts Commons expansion/renovation.

For each project, the city needs to develop a business case and find funding partners.

"As soon as we start pulling money out of that fund, then yes, a project could come forward and say, 'we've done everything,' and then we go, 'well, no we don't have any money now.' And when we've leveraged money, now what do we do?" said Sutherland.

City council will discuss Woolley's motion next week, but time for addressing the business property tax issue is running short.

The city needs to finalize next year's tax bills in April so notices can be mailed out.