Mayor Kennedy Stewart went on record this week saying he wants council to set a target on the property tax rate for 2021 at no more than five per cent.
So how the heck does the mayor think he can get down to five per cent?
In short, that’s city staff’s job.
That job will involve the city’s number crunchers showing council what will be lost under a five per cent tax rate scenario. To some extent, staff already completed that task for the 2020 budget.
You may recall the budget discussions last December had council initially consider an 8.2 per cent tax rate. In fact, in the days leading up to the vote, the mayor said he supported an 8.2 per cent tax rate. More on that later…
But before a final vote, council asked staff to provide scenarios of what a five, six and seven per cent tax rate would look like.
Let me refresh your memory on the five per cent scenario.
Off the top, it would have meant a reduction in the 2020 budget of $25 million.
Such a reduction would have translated to cutting approximately half of the firefighters and police officers requested by each department to be hired this year.
It would have also meant no extra library hours, reductions to branch hours, no funding for additional street cleaning and no additional funding to community policing centres.
Other cuts would have meant:
- A reduction in climate change work from $6 million to $3 million.
- A reduction in work related to boosting Chinatown’s economy.
- All recommended programs and initiatives related to the city’s social issues and diversity section be removed. That includes poverty reduction work and deferring all work on discrimination and anti-racism.
- Free swim lesson program deferred to future years.
- A reduction to storm and snow reserve fund.
There was more, but you get the picture.
But I’m getting ahead of myself here because council still has to agree with the mayor to set five per cent as the target. Council won’t debate this until March 11, but councillors did fire some questions at Stewart during Tuesday’s council meeting.
One of those questions — asked by Coun. Sarah Kirby-Yung — is one I would have asked: I’m wondering why the change of heart Mr. Mayor because you advocated quite strongly for a tax increase last year? In fact, you initially supported an 8.2 per cent tax rate.
Stewart: “Well, when budgets come out, I like to support staff. And so I have each year said that I support the staff’s initial recommendations, but then listen to council debates and make my final vote accordingly. So in this case, however, I think going through two years of this that an early cap is important.”
Pressed on how he landed on five per cent, Stewart offered that it was “a bit of a finger in the wind” exercise, although he added that he felt it was a number councillors would be more or less comfortable with.
“It would be nicer if we could come a little bit closer together as a council when we come to our final decision, and have more people support the final number,” he said.
Coun. Lisa Dominato reminded the mayor that she unsuccessfully moved a motion in the last budget debate, which aimed to reduce a property tax increase to five per cent.
Dominato to the mayor: “So what’s the rationale for bringing this forward now when council had an opportunity to be doing this last December?”
Stewart’s response was not quotable, so I’ll paraphrase: Doing this now provides direction to staff so when they come to council in June with their early budget estimates, it will allow us to shape our decisions on priorities for the rest of the year.
By the way, the mayor said a five per cent tax rate — when compared to this year’s seven per cent rate — would mean a $16-million cut from a $1.8-billion budget.
Where that $16 million would be cut is an open question.
Five per cent is not unthinkable, as previous rates in Vancouver have shown. The tax rate was 4.24 per cent in 2018 and 3.9 per cent in 2017.
Taxes between 2012 and 2016 averaged two per cent, with Vancouver at one point having the third lowest property tax increase in the region.
But that’s history.
New council, new priorities.
To summarize: the mayor initially supported an 8.2 per cent tax rate for this year, agreed to seven per cent and now wants a maximum five per cent for 2021.
We’ll learn in March whether Stewart gets council’s support.
Either way, this December’s budget vote will come with a tax increase. Place your bets now on what the rate will be, and whether Stewart’s “finger in the wind” exercise gets a thumbs-up.