Inflation bites: City of Regina's proposed 2024 budget features 2.2% mill rate hike
Council will consider the proposals Dec. 13-15
City of Regina administrators are recommending a property tax hike in its proposed budget for 2024 as the city feels the pinch of inflation.
City manager Niki Anderson and Bill Lacey, the city's executive director of financial strategy and sustainability, walked reporters through the document's key elements Friday afternoon during a technical briefing.
City administration is proposing increasing the mill rate by 2.2 per cent, mainly because it has become more expensive to maintain city services and buy basic building materials, such as gravel and concrete, for capital projects.
"Income tax goes to the federal and provincial governments and their income goes up every single year because income goes up. So they don't have to raise taxes because they already are collecting it naturally with an increase," Mayor Sandra Masters told reporters later during a scrum.
"We have very rigid, hard lines. We have to grow our tax base … but barring that, when our costs go up, the only avenue we have, really, is through property tax increases."
The city is entering the second year of its first multi-year budget.
The second year was supposed to be "less intensive," Anderson said, adding that usually any changes made at this time would be caused by council direction or significant unanticipated events.
"Unfortunately, since the two-year budget was initially developed, we have experienced unanticipated economic events," she said. "The city now faces a fiscally challenging environment."
Construction costs rise
Inflation has driven up costs, she said. For some capital projects, construction costs rose by 30 per cent.
The city opted to defer multiple projects as a result, including the 11th Avenue renewal, Saskatchewan Drive corridor and Ring Road safety improvements.
The city also had to increase the mill rate, Anderson said. The administration tried to keep the tax close to what was initially proposed for the multi-year budget in 2022.
The proposed budget shows the mill rate increase would have been 5.29 per cent to cover civic and police operations, recreational infrastructure and a one-time dedicated mill rate to support the Eastern Pressure Solution — an infrastructure project to expand the city's water network.
However, it was offset by a 3.09-per cent reduction for garbage collection. Starting in the new year, curbside garbage, recycling and organic waste pickup will be paid through a utility fee based on the size of one's bin.
If the tax increase is approved, city administration estimates the average household in Regina would pay almost $52 more in taxes next year — about $4.30 more a month. The city's estimate is based on a property assessed at $315,000.
City council previously approved increasing the water utility rate by four per cent in 2024 to maintain the service and pay for renewing the Buffalo Pound Water Treatment Plant. Higher taxes, the new waste services fee and increased utility costs could result in an average household paying just over $233 more in taxes and fees next year — or $19.42 more per month.
Businesses will also have to pay more in taxes, but how much depends on the size of their building.
A standalone store, for example, would be taxed about $36.29 more a month next year, while the owner of an office tower would have to pay almost $1,400 more a month, the proposed budget shows.
The city has not yet received an approved budget from the Regina Police Service (RPS), said Lacey, the city's head of financial strategy and sustainability. The proposed budget, as a result, included the initial 2024 budget the RPS put forward for the multi-year budget back in 2022.
As a consequence, the mill rate could change by the time city council sits to deliberate the proposed budget, Lacey said, but the administration would first look to cut costs internally first.
Changes to REAL not expected to affect taxes: Lacey
The proposed budget was also developed before recent developments with Regina Exhibition Association Limited (REAL), a municipally owned corporation that runs facilities including Mosaic Stadium.
REAL, which is hemorrhaging money, is seeking more than $5.8 million from the city this year — more than five times greater than the $1.1 million the organization received each of the last three years.
The city's proposed budget, which assumes REAL is in charge of Tourism Regina, suggests giving REAL $2.52 million in total grant funding.
This week, however, city council directed the administration to start transitioning Tourism Regina from REAL's jurisdiction back within the city's portfolio. Council may also consider dissolving REAL altogether.
Lacey doesn't expect the changes within REAL's to affect the mill rate, he said. The grant money would be reallocated to the city's operating budget.
City council will deliberate the proposed budget from Dec. 13 to 15.
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