Fall 2023 Budget Adjustment
Over the last two weeks, City Council has been discussing and debating the Fall 2023 Capital and Operating Budget Adjustments (you can find related background resources here).
This fall adjustment was hard - it felt just as hard as last year’s 4-year budget, as we grappled with a higher than anticipated proposed tax rate due to a number of reasons, and subsequently went through many different options and scenarios to reduce where possible, find savings, and importantly keep investing in public services that Edmontontians rely on and help them to live a better life. My office is committed to ensuring that you get the services that you deserve, connecting you to the right places in our City when you might experience issues, and sharing your feedback to continually improve.
Thank you to the City staff for their hard work in preparing this budget adjustment, and my colleagues on Council for their collaboration and discussion. Although the Fall Budget Adjustment is now complete, this is an exercise that we will continue with throughout the 2023-2026 Budget Cycle. The work does not end here.
This blog includes my reflections on:
The 2023 Budget Adjustment process.
What does this budget fund?
Why was this budget adjustment challenging?
Why I ultimately voted to support the budget.
What is the final budget adjustment, and what will you see from your dollars?
Proposed Tax increase: 2024: 7.09%, 2025: 5.04%, 2026: 4.53%
Final Tax increase after budget adjustment: 2024: 6.6%, 2025: 5.3%, 2026: 4.7%
Cost per day for an average Edmonton Household: $8.71/day for 70 lines of business
From what was passed during this budget adjustment (and what was not), City Council focused on items that were the most critical, including maintaining our expanding inventory of infrastructure, and reinforcing funding for some much needed services that I believe help to make our City better for all. These are services that Edmontonians will see on our streets and feel the impact of including. A few items that I wanted to highlight include:
Policing and Public Safety: 1.6% of the property tax increase is going to the Edmonton Police Service. Part of this increase is from the Police Funding Formula, which I supported earlier this year to align police funding growth with population growth and inflation. The other part of the increase is due to a salary settlement, which was something we did budget for but was much higher than anticipated. I hear from residents about public safety, in communities and on transit, and their desire to see more done. Our police service is a vital part of community safety, and is one of the many ways the City supports well-being. With the approval of their funding packages, the funding formula, and the salary settlements, we have provided EPS with the resources and tools they have asked for, and now we need to see results from this investment.
Public Transportation: Transit is one of our KEY frontline services and one I hear a lot about from Karhiio residents. In this budget adjustment, I voted to invest in redistributing the service hours from buses running prior to the Valley Line Southeast LRT opening - these bus hours will now be reallocated to other parts of the City where there are gaps to be filled. We also saw capital investments in new buses, and a Satellite Transit Garage, all of which will help to bring more service hours online to support Edmontonians. Transit is important for affordability, supporting low-income individuals and families who might not travel with a vehicle, building an equitable City, and critically, achieving our climate goals by reducing emissions.
Anti-Racism: This Council is making even more investments in anti-racism, including the implementation of our Anti-Racism Strategy, Anti-Black Racism Action Plan, and our Indigenous Framework, transforming how we as a city are accountable and responsible for anti-racism. The Independent Body that would be created with this investment will be community-based, and will be a convening point for anti-racism concerns, education and advocacy, along with ensuring accountability by the City as we continue implementing our Strategy and Action Plans. In this time of greater division, I am glad anti-racism is one of this Council’s top priorities.
Housing: We continue to invest in affordable housing, something that is very much needed with the growing number of people living rough on the streets, and the many people facing housing insecurity. While housing falls under the purview of the provincial government and federal government, we continue to hear the need from Edmontonians, and step up to further invest in new units, shelter spaces, permanent supportive housing, and supporting our affordable housing providers.
Tweddle Place Living Wall: This service package was specific to Ward Karhiio, and is one which I was happy to see funded. The Living Wall emerged from the Mill Woods Flood Mitigation Task Force (a future blog on this group will be coming soon), which was created in response to the flooding in Mill Woods over a decade ago. This wall is a nature-based solution compared to a traditional noise attenuation wall. This has now transitioned from EPCOR to become part of the City inventory. New infrastructure comes with a need for operating dollars to maintain this asset.
Not too dissimilar to last year, there were a lot of important items that came forward that were not funded. We will continue to explore opportunities in upcoming years and through advocacy with other levels of government to bolster services. Multiple subsequent motions proposed after the budget was approved will ensure areas that we were not able to fund right now, will be followed-up with diligence to bridge service gaps. Some of the notable ones include:
An Assisted Snow Clearing Pilot to better support seniors and people with disabilities;
Funding for Explore Edmonton to continue to grow our tourism economy, and produce signature YEG events;
Support for the Event Attraction Program, focusing on attracting large-scale sporting events to Edmonton (e.g. international tournaments, exhibitions, and more).
What challenges are we experiencing at a municipality?
We continue to grow as a City, and are seeing large jumps in population growth. On top of that, we are catching up after years of belt-tightening and multiple below-inflation tax increases (i.e., no tax increase in 2021, and the tax increase in 2022 was the lowest among Canadian municipalities).
I hear from residents about how challenging a tax increase is with our current economic climate, and the pressures of affordability that everyone is facing. I think about this a lot and do not take your contributions to our city and this discussion lightly. The rise in costs that households are seeing is similar to the rise in costs we are seeing as a City. Like households, the City is also facing impacts from inflation, from supply chain and labour force issues, from rising interest rates, utility and construction costs.
When it comes down to it, we had difficult decisions to make to maintain the service levels we currently offer to Edmontonians, and address some emerging needs. These difficult decisions will likely, unfortunately, continue each year of the 2023-2026 budget cycle.
Across the country, we are seeing trends in financial hardships facing municipalities and the unsustainability of simply relying on a property tax base to provide services to an ever-growing population, and often in areas that are not in our typical wheelhouse. This is why more than ever, we also need to strengthen our relationships with the provincial and federal governments, particularly when it comes to fiscal frameworks that govern and can help address the challenges we face as municipalities.
Why I voted to support the budget adjustment
In addition to your many feedback, there are a few contextual considerations that informed my decision-making, along with the in-depth discussion at City Council:
The pressures being seen by the City of Edmonton, are also being experienced by cities across the country. The City of Calgary will see a 7.8% tax increase, City of Saskatoon has a proposed 7.14% increase and City of Vancouver has a proposed 7.6% increase. Even mid-sized cities like Airdrie are looking at a 6.9% tax increase. We are not alone in facing the various challenges cities of all sizes are experiencing. This helped me to understand the landscape we are all operating in.
With the increases set in this budget adjustment, property taxes will come out to be about $8.71/day for a typical household. With this, the City is able to offer 70 different lines of business. Even if you don’t think you use a lot of City services, you’re likely encountering them on a daily basis. The roads we drive on, the neighbourhood sidewalks, green spaces, parks, some fantastic libraries and recreation centres with growing usage, emergency services, public safety, waste collection and more. These many lines of services make our city run and remain competitive in this global market, helping us grow and meet the vision of our City Plan.
Beyond the quantity, the quality of the services we offer is also vital. This budget adjustment is about balance - finding savings while making sure we are not eroding public services. Based on the reductions and additions approved, I think we have struck that balance to ensure that people do not experience declining key service levels, while bringing down the tax levy as much as possible. The work to keep tax increases lower, while bolstering our frontline services will continue through OP-12 (a 4-year exercise to find efficiency and reallocate resources to the frontline).
I will continue to work with Administration and my Council colleagues to see how we can find savings, improve frontline services, and maintain and ensure that each dollar is invested in a way that provides a positive return on investment. Next year, the Spring Budget Adjustment will be another critical juncture as we set the final tax rate, and make any final adjustments, particularly based on the subsequent motions proposed.
