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.

8.39%, 8.42%, 7.84%

As promised by city officials in Saturday's print Gazette,  municipal tax increases will not reach double digits for the next three years.

City administration lifted the lid from the 2009-11 budget during a preview for the finance and audit committee on Tuesday. All council members sit on the committee, so it was their first opportunity to see the proposed increases.

Here's the proposed tax hike breakdown:

2009: 8.39 per cent

2010: 8.42 per cent

2011: 7.84 per cent

The 2009 increase works out to an extra $17 per month in taxes for the owner of $420,000 single-detached home. That's $204 a year for those without a calculator.

Utilities up 9.5%

Taxes are not the only means for a municipality to raise revenues. Utilities are also on the rise — 9.5 per cent annually for all three years of the budget. 

The utility hike means the average* monthly bill will rise $7.06 in 2009 to $81.37. That would increase to $89.10 in 2010 and $97.32 the year after.

* The city bases the average utility bill on 20 cubic metres of water consumption and two bags of garbage.

I'll have more information about the 2009-11 budget later in the day.