Not a hidden tax hike: mayor

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This article was published 03/03/2015 (3334 days ago), so information in it may no longer be current.

Brian Bowman was applauded for crafting a 2015 city budget that dramatically increased spending on roads while bringing in the lowest property tax increase in three years.

But missing from the praise was a series of fee increases that effectively doubled the property tax increase for the average homeowner.

The preliminary operating budget released Tuesday featured a property tax increase of 2.3 per cent, the target Bowman had set during the campaign for last October’s election.

That’s an additional $37 on the annual tax bill of the average home assessed at $263,000 — $1,581 in 2014, rising to $1,618 this year.

But Bowman and his executive policy committee members are also proposing another $35 increase in fees for the same homeowner: $5 more for the annual garbage-disposal fee ($55 instead of $50) and an increase in the frontage levy that amounts to $30 more for a 50-foot lot.

Bowman insisted he stuck to his campaign promise to raise property taxes at the rate of inflation — 2.3 per cent — and dismissed the idea the hikes in the frontage levy and garbage fee are a hidden property tax.

“There’s no doubt this was a difficult budget,” Bowman told reporters after the budget was released. “What you’re highlighting is there were difficult choices to make.”

Bowman defended the fee increases as necessary when the city was facing a projected $79-million shortfall between revenues and expenses for this year.

“It will be up to Winnipeggers, and ultimately council, to decide if this proceeds.”

The budget will be voted on at a special meeting of council March 23. Between then and now, several civic standing committees will review the budget in detail.

The Winnipeg Police Service budget, which saw a modest increase of 2.6 per cent, will be the first department to be examined, at Friday’s meeting of the Winnipeg Police Board.

Council finance chairman Marty Morantz (Charleswood-Tuxedo) said the razor-thin margin for balancing the budget gave him no choice but to raise taxes and raid reserves.

“I don’t like the idea of raising taxes. I don’t like the idea of raiding the stabilization reserve. All those things make me uncomfortable. I regret that we had to do it,” Morantz said.

Morantz said some service cuts had to be made but said he didn’t think they would impact residents. These include: elimination of the park police and summer student park ambassador program, an annual savings of $851,000. Affected staff are to be redeployed; a reduction in the fall sweeping program, a savings of $700,000; and reduced hours for indoor pool programming and closing some other recreational facilities at indoor pools, for a $100,000 savings this year and projected $300,000 annually in subsequent years.

Bowman came into office promising to continue necessary spending on roads and keep the tax increase to a minimum — all without any cuts to front-line services.

The budget proposes to keep in place the two per cent property tax increase dedicated to local and regional streets, which had been put in place by former mayor Sam Katz. The remaining 0.3 per cent will cover all other city spending.

The city will be spending $103.3 million on streets this year, a 22.7 per cent increase from the $84.2 million spent in 2014.

The budget calls for a marginal decrease in the business tax rate, from 5.7 per cent to 5.6 per cent, but proposes to raise the cut-off for eligibility for the small-business tax credit to $30,000, meaning almost half (48.1 per cent) of small businesses will get a full rebate on their business tax this year, up from 41 per cent in 2014.

The changes to the business tax will result in the business community contributing $1.3 million less in property taxes this year than in 2014.

‘There’s no doubt this was a difficult budget. What you’re highlighting is there were difficult choices to make’

— Mayor Brian Bowman

One of the big challenges for Bowman and his EPC was financing the $20-million annual payments that come due beginning in 2020 for the completion of the southwest transitway corridor.

There will be no tax increase this year for the corridor, but beginning in 2016, there will be annual property tax increases of .33 per cent for 10 years, with a five-cent fare increase, on top of the regular fare increases. Officials said that by 2020, that plan should generate the $20 million needed to cover the transit bill.

Bowman also made good on his plan to create a downtown dog park. While a site has yet to be chosen, the budget sets aside $300,000 for the initiative.

Coun. Jenny Gerbasi, who often takes on the role of council critic, said there was much to be pleased about in the budget.

“I think they pulled a rabbit out of the hat on this one,” Gerbasi (Fort Rouge-East Fort Garry) said, adding she wasn’t pleased with a special five-cent hike in transit fares for next year to offset the cost of completing the southwest transitway.

Gerbasi said she liked the increase in funding to the arts, restoration of funding levels to the city’s civic museums and an increase in funding for streets and roads.

“You’re never going to be pleased with everything in (the budget),” Gerbasi said. “I do feel better about this budget than I’ve felt about previous budgets.”

Chris Lorenc, executive director of the Manitoba Heavy Construction Association, was happy with the big increase in spending on roads, adding he hopes Bowman is successful in convincing the provincial government to share a portion of the controversial PST increase with municipalities.

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CUPE Local 500 president Mike Davidson said an increasing reliance on vacancy management to reduce costs will mean a reduction in service.

“This is a death of a thousand cuts,” Davidson said of vacancy management. The city expects to save $17.7 million this year by delaying hiring replacement staff. The city saved $14.3 million with this practice in 2014.

Bike Winnipeg’s spokesman Mark Cohoe was happy more money is being dedicated over the long term to bike corridors and the active transportation plan. “It’s a little more (immediately). It’s a lot more in the five-year plan for bicycle corridors and recreational pathways.”

For bike corridors alone, the funding stays the same this year at $1 million, but then rises to $2.2 million per year by 2020. “That’s a substantial increase over that five-year period.”

aldo.santin@freepress.mb.ca bartley.kives@freepress.mb.ca