Mayor predicts 5% property tax hike

Calgary's mayor is telling homeowners to be prepared for a property tax hike.

Homeowners could see a five per cent tax hike, which will work out to about $48 a year for the average homeowner, Mayor Dave Bronconnier said Monday.

In the spring, council voted in favour of a 6.1 per cent tax hike for 2010. At the time, the city was expected to be short about $44 million in revenue.

But a 1.7 per cent cut in every department except emergency services and transit will mean both layoffs and tax savings, said Bronconnier.

"Really in the past 10 months or so, there has been significant effort on behalf of city council and administration to bring in the budget as low as possible while at the same time, maintaining those services that Calgarians have said have been very important to them," he said.

The city's budget for the upcoming year will be made public on Thursday and council is expected to debate it and come up with a final number by the end of the month.

The size of the tax hike could go up or down depending on which items are added and which are removed from the budget.

One item not yet in the budget is the extension of a southeast Calgary racetrack's lease.In September, councillors voted in favour of extending Race City Motorsport's lease for another five years. City officials estimate leaving Race City on the land will cost taxpayers $600,000 a year for event security, garbage collection and future remediation of the land.

Some councillors, like Ald. Ric McIver, would like to see a smaller property tax increase. He said if there is any tax increase, it should be more in line with the rate of inflation. McIver supported the Race City lease extension.

Homeowners saw a 4.6 per cent tax hike in 2009, while businesses saw a 5.2 per cent hike. Roughly half that amount was forwarded to the city, which set its increase at 5.3 per cent; the rest went to the province as the education portion of the tax, which was set at 3.9 per cent.The province has not yet set the education portion of the 2010 tax bill.

The actual increase always depends on the property's assessed value.