Critics slam Katz’s ongoing tax freeze

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This article was published 25/01/2010 (6034 days ago), so information in it may no longer be current.

Mayor Sam Katz plans to freeze property taxes in Winnipeg for the 13th straight year, but critics on council are once again questioning the financial wisdom behind the move.

City council has not increased the pool of taxes collected from existing Winnipeg properties since 1997, when the city had one of the highest municipal property tax burdens in Canada.

Although Winnipeg is now at the low end of the scale — and may be able to stay there in perpetuity even with modest annual increases — Katz said the move would do little to help the city pay for billions in upgrades required to roads, bridges, sewage-treatment plants and other amenities.

"If you raise property taxes by one per cent, it brings in approximately $4 million. Most people think an increase would bring in tens of millions of dollars," the mayor said in an interview late last week.

Since 2006, Katz has come around to the view that cities deserve a larger chunk of the taxes collected by the federal and provincial governments. And since Winnipeg’s economy makes up such a large proportion of Manitoba’s economy, this city deserves an especially large share.

"One (point) of the PST is approximately $118 million. The bottom line is, property taxes are regressive. We need to look at the whole situation," Katz said. "We get eight per cent of the taxes. And then on every major project, we’re expected to make a contribution of one-third of the cost. Something’s got to give there."

At Tuesday’s state of the city speech, Katz is expected to reiterate his intention to freeze property taxes when he and city council finance chairman Scott Fielding table a draft version of the city’s 2010 operating budget in February. Fielding has argued Winnipeg property owners can’t afford any increase.

According to city statistics, a one per cent property tax increase in 2010 would cost the average residential household an additional $14.63 and generate an additional $4.27 million in revenue for the city.

Couns. Dan Vandal (St. Boniface) and Russ Wyatt (Transcona) are among politicians who argue the city would be acting irresponsibly if it does not levy at least a modest increase this year.

Vandal advocates a two per cent increase, which would cost the average household an additional $29.26 and generate $8.54 million in additional revenue.

"That’s not $8 million this year. That’s $8 million every year," Vandal said. "There’s no reason you can’t use that and continue to lobby for a better deal for the city with other levels of government."

In recent years, the city’s tax freeze has served as an irritant in its relations with the provincial government. The Gary Doer government viewed the freeze as a reluctance to make hard decisions, and former finance minister Greg Selinger is now premier.

As well, Wyatt contends the failure to make inflationary tax increases over the past 12 years has seen the city forgo $190 million in revenue.

"Thirteen years of freezing taxes sounds impressive, but our infrastructure deficit has skyrocketed. This is not sustainable," Wyatt said.

"This is an election year, so the public is being told taxes will be frozen again. But do they really believe they will be frozen in 2011? Why not be up front about the city and the challenges we face?"

 

bartley.kives@freepress.mb.ca

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