Why 8.39%?

City council insists the majority of next year's tax increase is needed just to maintain services. Some 6.77 percentage points of the 8.39 per cent tax increase will go to existing services.

The reason? For one, it's getting more expensive to to run a municipality, thanks to rising fuel and construction costs, wages and materials.

Secondly, St. Albert, like the rest of the region, is feeling the pinch from a downturn in new home construction. Fewer new homes means the city has fewer property tax dollars to collect. The city uses those new tax dollars to pay for new programs and services.

Growth forecasts are downright gloomy compared to past years. The city predicts the growth rate will be just 1.22 per cent in 2009. That will increase slightly to 1.75 per cent in 2010 and 2.0 per cent in 2011. Traditionally, St. Albert has been in the 4.0 per cent range.

Growth

While the 2009 figures show mostly a hold-the-line budget, growth does factor into the tax increase. Growth costs — mostly to maintain new areas of the city — can be attributed to 1.29 percentage points of the tax increase.

New initiatives

Only a small portion of the new tax dollars will pay for new initiatives. The share of the total tax increase works out to 0.33 percentage points.

Public reaction?

Does any of this information make tax increases of 8.39, 8.42 and 7.48 per cent in 2009-11 more palatable to the public? That remains to be seen.

One sure bet is council and administration will go at great lengths to explain the inflation pressures facing St. Albert and all municipalities in this province. (I'll write about the 'municipal price index' in later posts). But already St. Albert city hall is more than willing to point out Edmonton and other cities are facing possible double-digit increases.

The public has its first chance to sound off this Saturday at
St. Albert Centre from 2 to 5 p.m. Council members will be on hand to answer your questions and jot down comments.

It's your city, have a say.