City of Edmonton Counselors are patting themselves on the back this week after announcing that property tax rates are only projected to rise 3.6% next year. While it is lower than the 5% they originally suggested in April, it’s still 3 times higher than what CPI has averaged this past year.
The City clearly has a spending problem. To illustrate the long-running variance between tax growth and inflation, NAIOP Edmonton produced the following graph.
We’ve written extensively about how the City of Edmonton is putting undue pressure on the property tax base. Earlier this year, we highlighted how commercial and industrial property owners paid higher taxes (via the corresponding mill rate) than any surrounding municipalities, including Red Deer and Calgary. And the differences are significant, with Edmonton property owners paying nearly twice the amount of taxes as Leduc, Nisku, Acheson and Sherwood Park.
Yes, the City needs to pay their bills and the property tax base plays a pivotal roll in collecting revenue to do so. It is equally apparent, however, that the City is poorly managing expenses and we are all paying extra for it as a result. In what environment, outside of government and corporate monopolies, could these incongruous increases be passed on to the customer without an upheaval?
It seems like classic political maneuvering. Tell the public that something proposed is going to be very, very expensive, then lessen the sticker shock by saying they were able to “make some cuts”, “find some savings”, “force some tough decisions” and have it come in lower. In the case of property owners in Edmonton, counselors suggested property taxes might increase by an appalling 5%, then hoped to come off as fiscally responsible by proposing a more modest (read: slightly less appalling) 3.6%.
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