Number of options could shift tax burden in Calgary to homeowners from businesses

Calgary city council will have a bucket full of numbers to digest and ruminate over as it prepares to tackle the 2020 budget and the thorny issue of the tax shift problem.

On Tuesday, council’s priorities and finance committee took a look at some preliminary numbers when it comes to assessment values of properties in Calgary.

It appears there’s been a levelling off in the dramatic drop in downtown office property values. They are up three per cent and that could help to lessen the blow somewhat in non-residential property taxes.

Meanwhile, the Assessment Tax Shift working group presented its final report to the committee and came back with several options and their implications on the tax bill for 2020.

Those included having a 50-50 split between what homeowners and businesses pay in property taxes, the status quo of 51-49 in favour of homeowners and one that is appearing to have support from some on council: a 52-48 split in favour of businesses.

If Calgary city administration came back with a zero per cent operating budget increase, homeowners would face a tax increase under the 52-48 formula. A median assessed home at $455,000 would face a tax bill of $2,136, an increase of $136.

Non-residential ratepayers would benefit but the one-time rebate they had this year disappears so they would likely have to pay more in taxes.

“This whole thing is a giant schmoz (schmozzle),” said Councillor Jyoti Gondek, who headed up the working group.

“There are all kinds of different scenarios you can run — some of them will generate a decrease, some of them, no matter how great that decrease is, because we have created this habit of giving a rebate every year, it’s going to be hard increase for people to take.”

Still, Gondek said council has been provided some valuable information in going forward to the budget adjustments next month.

“We have what we need before us and now we need to make some decisions, and if it means an increase to non-residential properties or it means an increase to residential properties and that’s a decision we make, then we have to live with it,” Gondek said.

“If it means a decrease, we need to live with it as well.”

Mayor Naheed Nenshi said providing another year of rebates would make sense but that he needs “to find more rabbits out of more hats.”

“Calgary spent all the money this year and created a bow wave,” he said. “My proposal had been to spread it out over two years but we spent it over one year.”

To deal with the issue of dramatic property tax hikes for businesses outside the downtown core, city council made $60 million in budget cuts in July and provided a one-time rebate of $70 million that saw businesses pay 10 per cent less tax in 2019 than they did in 2018.

READ MORE: Calgary councillors told more cuts possible in next year’s budget

Calgary council will begin budget adjustments on Nov. 25.

© 2019 Global News, a division of Corus Entertainment Inc.

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