As budgets go, there’s more to like than not in the City’s 2017 Operating and Capital Budgets. There’s also more questions than answers.
On the positive side, the budget achieves strong progress in expenditure control. Overall spending rose by 2.3%, in line with population growth and inflation, constituting one of the smallest increases in a decade. Emergency services (police, fire and paramedic services) account for almost half of the city’s annual $1 billion operating budget. Budget 2017 proposes increases of 1.3% and 4.7% for police and fire/paramedic budgets respectively, whereas previous years have seen annual increases ranging from 5-10%.
In addition, fees, levies and other charges were left unchanged, other than inflationary adjustments. Approximately $11 million in efficiency gains are anticipated in Budget 2017, demonstrating a strong and continued focus on value and results within internal operations. At The Chamber and at our member businesses, we know efficiency isn’t a stop-start process: it’s a state of mind and a constant exercise, and thus encouraging to see the City embark upon this path.
While the Chamber remains steadfast in its calls for the elimination of the Municipal Business Tax, the proposed rate reduction from 5.3% to 5.25% was another positive move. The rate decrease represents the third consecutive year of downward pressure on the tax.
The benefit of the reduction is partial offset by the missed opportunity to raise the business tax exemption threshold, left unchanged at 2016 levels ($32,220 in Annual Rental Value). While 2017 is a non-assessment year, the Chamber continues to advocate for set annual increases to the exemption threshold so as to ensure businesses that fall off the business tax roll, remain off the roll.
Of utmost concern in Budget 2017 is the reduction in local and regional street renewal investments and the changes in the Cash to Capital Program.
According to the City, 2% of the 2.33% property tax increase (estimated at $10 million) is to be dedicated to the 2017 Street Renewal Capital Program (regional and local streets). In 2016, total program spending was $105.2 million; in 2017, program spending remains flat at $105.2 million, necessitating the question as to where the estimated $10 million in dedicated revenue has gone? If it has indeed gone to the program, then the City has effectively transferred $10 million from last year’s program to general revenues or other program spending. Given the stated, dedicated intention of the 2.33% property tax increase, the flat investment is of significant concern.
Lastly, the 2017 Cash to Capital program, effectively serving to transfer funds from the city’s operating budget to its capital budget, is set to decrease $23.2 million from the 2017 forecast of $78.8 million. Critics of the City’s recently approved growth impact fees suggest the Cash to Capital program is one area where potential revenue from the fee could find its way into the general operating fund. As such, The Chamber will continue to monitor these changes to ensure any and all impact fee revenue remains dedicated and used as mandated.
The Winnipeg Chamber of Commerce will be appearing before City Council on December 13 to speak in support of Budget 2017, with the concerns and recommendations noted above.
If you’d like more information on Budget 2017 and/or the Chamber’s advocacy efforts, please contact Director of Advocacy, James Magnus-Johnston at 204.944.8484 or firstname.lastname@example.org.