News / Calgary

City administration warns against zero tax increase

Councillor suggests it’s time for city’s rainy-day fund

Metro File

City administration is giving council its two cents on where the tax rate should be set for 2017, and it doesn’t see much hope for a tax freeze.

Council directed administration to report back with a number of scenarios for different tax rate hikes, including keeping rates where they are.

The report spells out various sources of cash that could be used to combat a tax hike.

It also delves into the levels of service cuts one could expect, except much of the fine detail on that part of the report is confidential.

The report spells out ways to get the increase as low as 1.5 per cent, but warns against going lower.

“The risks associated with rate increases below 1.5 per cent increase materially and, for this reason, administration advises against using them,” reads the report.

However the numbers don’t bother Ward 12 Coun. Shane Keating, who sees no problem in getting to zero, or at least extremely close.

“I would be in favour of taking funds from the Fiscal Stability Reserve (FSR) to cover whatever shortfalls we have for this year,” said Keating,

Known as the city’s rainy-day fund, it currently has about $300 million. Keating believes it is exactly what the fund was set up for.

The city had already mapped out tax increase for four years leading up to 2018, when the rate is currently scheduled to jump 4.7 per cent.

Administration says council should defer any decisions about 2018 until next spring.

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