City’s tax freeze thaws

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This article was published 28/02/2012 (4957 days ago), so information in it may no longer be current.

The City of Winnipeg’s property-tax freeze has ended after 14 years, as city council has proposed a 3.5 per cent hike on residential and commercial property taxes in 2012.

The city’s 2012 operating budget calls for $900 million in city spending this year on all city services, from policing to insect control. That’s an increase of $53 million over the 2011 operating budget.

The property-tax hike will raise $14.8 million to help cover the spending increase.

Katz and city council finance chairman Scott Fielding (St. James) both said ending the tax freeze was a difficult decision, but Winnipeg is faced with growing cost of services, salaries and pensions. Katz said he has pushed for access to more growth revenues from the province to pay for the rising cost of services, but to no avail."It comes to a point in time it’s no longer realistic if you want to maintain the services," Katz said. "The one thing I do know is citizens not only want you to maintain those services they want more services."

In addition to the tax hike, the operating budget will be be balanced with the help of $9 million in taxes from new properties, a $10-million budget surplus from 2011 and increased federal and provincial grants for policing. There will be no increase in frontage levies, as there was in 2011.

Emergency services accounts for the bulk of the city’s extra expenses this year. The police and fire-paramedic service budgets increased a combined $30 million since last year and now account for $375 million in spending — 42 per cent of the city’s budget.

Higher salaries for police are pegged at $8.9 million, pending the resolution of a contract dispute between the city and its police union. The city also plans to pay an additional $7 million into the police pension plan.

The city also plans to spend an additional $15 million on Winnipeg Transit operations, but this is not dependent on the planned 20-cent bus fare hike. All of the revenue from the proposed hike, which would take effect on June 1, would flow into a fund to pay for future rapid-transit operations.

In an attempt to save $13 million this year, the city plans to delay filling vacancies in all departments. This will not affect the police, fire-paramedic or transit departments.

For the average Winnipeg residential home the 3.5 per cent tax hike will work out to an additional $48 to $60 a year, said Fielding, adding he is pleased the city was able to hold the line on property taxes for 14 years. He and Katz said Winnipeg now has among the lowest municipal property-tax regimes in Canada.

City council committees will scrutinize budget details over the next three weeks before council as a whole debates the spending plan on March 20.

Fort Rouge. Coun. Jenny Gerbasi said she has no issue with a tax increase but accused Mayor Sam Katz of being hypocritical. During the 2010 mayoral campaign, a Katz robocall campaign suggested people on low incomes might lose their homes if they elected rival Judy Wasylycia-Leis, who had promised a two per cent tax hike.

Katz said a tax increase was not warranted at the time.

On the other hand, Colin Craig of the Canadian Taxpayers Federation argued the city could have avoided a tax hike if it contracted out more services. He also slammed the mayor for blaming the province for a lack of revenue, claiming the City of Winnipeg receives one of the best provincial funding deals in Canada.