Proposed Saskatoon property tax increase would help pay for bus rapid transit, curbside organics programs: report
City administration is proposing a property tax increase as planning for Saskatoon’s next multi-year budget begins.
In a preliminary report headed to the city’s governance and priorities committee on Monday, administration suggested an estimated rate for 2022 and 2023, based on growth and inflation, that covers the increasing cost of services.
This proposed property tax increase would amount to 5.96 per cent and 5.42 per cent during the respective years.
The suggested tax increase is not final and is only part of the early planning stages for the city's budget deliberations this fall.
“Administration has made efforts to limit the increase in budgetary expenditures with the aim to lessen the potential property tax increase while maintaining existing service delivery levels,” Chief Financial Officer Kerry Tarasoff said in a news release issued Thursday.
“Through the administrative budgeting process, the administration has already cut $7.5 million from the initial indicative budget for 2022. These adjustments reduced the potential indicative property tax rate by approximately three percentage points.”
According to the report, in order to maintain city services, including policing, at their current level a 4.82 per cent increase for 2022 and at 4.58 per cent increase in 2023 would be required.
However, the suggested increase of 5.96 and 5.42 per cent over the next two budget cycles would allow the city to fund the phase-in Bus Rapid Transit program and the city's new solid waste and organics collection program.
The preliminary rates do not include the expected short-term impacts of the COVID-19 pandemic.
“COVID is going to be having a long-term impact on our budgets for the next at least five or maybe more years,” Tarasoff said in a news conference Thursday.
City administration estimates the fiscal impact from COVID-19 to be $16.8 million in 2022 and $10 million in 2023.
To address this, the city will require spending restrictions and a fiscal transfer from either the federal or provincial government, according to the report.
“Basically asking departments to really curtail and watch the spending, and only spend items where it’s absolutely necessary, so any kind of discretionary spending, like maybe relook at training or reduce training,” Tarasoff said.
“We’re pretty confident that there’s going to be at least transit operating offsets coming. We’re looking for a little bit wider range of support as every municipality in Canada is facing the same issues we are.”
Other options offered
The report said the proposed increase option would allow the city to meet all of its existing service level and contractual obligations and would resolve the long-term structural budget issues in solid waste and phase-in for a city-wide organics program.
City council will finalize its decision in the 2022 to 2023 budget deliberations set for November.
The administration also outlines two other options.
One of them involves decreasing the property tax rate below the indicative rate, which would require reductions to the budget that could change existing service levels.
The other would add to the property tax rate above 5.96 per cent and 5.42 per cent for 2022 and 2023, which would provide the ability to consider implementing some of the other budget options.
Expected costs outlined
The report also outlines expenditure projections for the next two years.
Saskatoon Police Service estimates an expenditure increase of $4,665,500 in 2022 and $4,836,300 in 2023. However, it said it continues to work through the details of its budget and will refine it further before its presentation to the Saskatoon Police Board in August, according to the report.
The report goes on to discuss expenditure increases required outside of indicative rates.
City council previously approved a four year phase-in starting in 2020 to help address waste handling budget issues and to implement a city-wide organics program. The report said $2,225,600 is being added in garbage collection in 2022 and $2,183,700 is going towards the organics program in 2023.
As for the Bus Rapid Transit funding plan, the report said phase-in amounts of $687,000 and $95,000 are required, and that a revised funding plan will be reviewed at the 2022 to 2023 business plan and budget review.
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