Budget 2021 Part 9: Conclusion
We are in one of the most challenging economic times in decades.
We have one of the largest unemployment rates of the major cities across Canada. Small businesses are struggling to stay afloat. Those same businesses are struggling to pay their staff who live in our communities. Some families and individuals are concerned about job stability and are trying to determine how they are going to pay their bills. Our provincial economy is very weak as the world around us changes and it creates pressures that we haven’t seen throughout my life. This requires a budget that we haven’t seen in decades.
This is the first time since 1997 that we will have no tax increase (0%).
That’s quite remarkable considering the demands for services that people have while we continue to grow as a city. I need to thank our City Administration. I know that some of these cuts are not ideal. Thankfully, most of the recommendations that I have written about in the previous budget blog posts were accepted without debate.
Of the approximately $60 million recommended for reductions, we worked to find about $6 million in offsetting savings to fund some critical services. That suggests to me that they did an excellent job finding reductions that can be accepted, even if we don’t love every change being made.
I believe that the mistakes made in the 90s were not made here. We aren’t going to stop maintenance and renewal. We aren’t going to stop working to address growth pressures which will create new jobs. This means that there should not be a larger bill ten or twenty years from now.
I need to take a moment to acknowledge that there are some people who will lose their jobs. While our Administration worked to keep job losses to a minimum by looking at removing vacant positions, there are still some people who will be negatively impacted at a time where people are dealing with a great deal of stress. No one wants to see that, but as noted at the beginning of this post, our economic conditions are dire and we needed to ensure property taxes did not add to the overall burden that people are facing.
Public sector workers can occasionally be vilified. I will never understand that. I don’t want to see layoffs in any industry and I would hope that no one ever wishes for a particular sector to be negatively impacted.
Key Items that are Funded
Fortunately, there were some positive adjustments that respond to the feedback we heard during the Public Hearing and over the last few weeks. The following changes relate to the reduction strategies listed in my previous Budget 2021 blog posts:
The proposed cuts to transit service hours were reinstated.
Funding for Jasper Place and Alberta Avenue Revitalization was scheduled to end this year but there is still some work to be done so we provided two additional years of funding to continue to help the revitalization efforts in those two areas.
The community rinks (Oliver and Tipton) and community pools (Eastglen, Oliver, and Scona).
The Community Investment Grant will have the funding restored. This grant is critical to many organizations who use this funding to serve Edmontonians.
The Green Shack program in the Fall/Winter/Spring will continue into the future. (The Green Shack program for summer is still funded but it wasn’t listed for a possible cut).
The Spay/Neuter program is fully funded.
The proposal to start the grass cutting cycle in May was refused and so grass cutting will continue to start in April to ensure our fields are ready for use as soon as possible.
Finding Savings in the Budget
A question that often comes up is what specific actions I have taken to help reduce spending. I’ve written about some of those actions in previous budget blog posts from December 2016, December 2017, and December 2018. For this year’s budget, I made a motion back in September related to the Middle Management Audit. The motion looked to reduce middle management and the final result of that motion was approximately $10.3 million in savings.
In my time on council I have committed to regularly looking for savings to keep tax increases to a minimum, or in the case of this year, not have an increase at all. The motion I made this year would not have been possible without the excellent work of our City Auditor and his entire team.
Future Budgets
While the decisions on future budgets will be up to the next council, I think the challenging economic times will likely require another year or two without a tax increase before modest tax increases are considered again. That will be challenging based on the growth pressures we are experiencing but in order to allow individuals, families, and businesses the opportunity to catch up after some very tough years.
Similar to this year, having a few more years without a tax increase will require additional cuts and we need to be realistic about that reality. When candidates come to your door and discuss taxes, make sure they share their specific solutions because it’s incredibly easy to say that we don’t want tax increases. In fact, I’ve still never met an elected representative that wants to increase taxes. Being able to deliver on those words with specific solutions that do not sacrifice our long-term financial viability is much harder.
Public Engagement
I want to thank all Edmontonians who participated in the budget process. Thousands of people shared their perspective on taxes in our city. The image below shows what he heard from different groups on whether taxes should be increased, decreased, or kept at 0%.I think those survey results show we found the right balance between maintaining most programs/services while continuing to maintain our infrastructure and address certain growth pressures. It should likely come as no surprise that the commercial property owners and those that manage a business in the city were the most concerned about taxes.
Some might be surprised how many people responded that they were comfortable with a property tax increase. There are likely a few reasons for that:
There are still people who have not been as impacted financially.
Property taxes and City utilities account for a much smaller share of the overall taxes most people pay each year.
Of course property taxes are more noticeable because unlike income tax which comes off before you receive your wage, property taxes have to be paid separately so it’s noticeable when that amount comes out of your account. That’s often why people will comment far more about specific expenditures in their municipality because it’s more tangible than what the provincial and federal governments use our taxes for.
Summary
Making cuts to programs and services is never ideal. That has a real impact on people’s lives that can be hard to quantify. As noted above, I think those real impacts will be kept to a minimum while still providing the needed relief for individuals, families, and businesses.
I want to thank my council colleagues. I actually really enjoy budget deliberations because I think it’s often where we perform our best. Yes, there are moments during budget where we aren’t at our best but, overall, I think this is one of the best examples of how we listen to each other and use that to inform the decisions we make. We agonize over every decision we make because every decision we make has a significant impact on the lives of Edmontonians.
While we all hope that 2021 is a much better year, this budget recognizes that there is still a long recovery ahead and we need to do what we can to support those who are struggling. I would ask that keep that in mind as we go forward. When you see a slight reduction in services to certain areas, please remember that those changes are being made to help our neighbours who might be dealing with some significant financial challenges. We will need to work together to rebound from this economic crisis but I am confident that we are up to the challenge.
Previous Blog Posts:
Part 1 https://www.andrewknack.com/budget2021part1/
Part 2 https://www.andrewknack.com/budget-2021-part-2-expense-reductions/
Part 3 https://www.andrewknack.com/budget-2021-part-3-facility-closures/
Part 4 https://www.andrewknack.com/budget-2021-part-4-funding-to-partners/
Part 5 https://www.andrewknack.com/budget-2021-part-5-increased-revenue-and-recoveries/
Part 6 https://www.andrewknack.com/budget-2021-part-6-service-level-reductions/
Part 7 https://www.andrewknack.com/budget-2021-workforce-strategies/
Part 8 https://www.andrewknack.com/budget-2021-part-8-staffing-changes/
