Saskatoon city administration recommends 5.96 per cent property tax hike next year

City administration is recommending a property tax increase of 5.96 per cent in 2022 and 5.42 per cent in 2023.

The recommendation now goes to the Governance and Priorities Committee (GPC) of City Council meeting on Monday.

That works out to an increase of about $10 a month for the average property owner in 2022 and another $9.70 in 2023.

"It was extremely tough for the administration," said Kerry Tarasoff, the city's chief financial officer, in coming up with a proposed budget.

"We basically cut or deferred … over $8 million in items that our administration had requested," he said.

"We went line by line — every business line and every service line and all of those key areas —  and tackled the question, 'Why do we need this and can it be deferred or can you go without."

Tarasoff said if the administration hadn't found that $8 million in savings, the proposed property tax increases would be close to nine per cent.

Proposed increase breakdown

Here is a breakdown of the proposed 5.96 per cent hike in 2022:

The city needs a tax increase of 3.01 per cent in 2022 just to maintain the current levels of service, said Tarasoff.

Then there is a proposed increase of 1.81 per cent for the police, 0.27 per cent for the bus rapid transit (BRT) program and 0.87 per cent for the solid waste and organics collection program.

In 2023, the city needs a tax increase of 2.81 per cent in 2023 to maintain current levels of service; a proposed increase of 1.77 per cent for police, 0.03 per cent for the BRT program and 0.80 per cent for the solid waste and organics collection program.

"The city's expenditure increases are driven primarily by growth and inflation," Tarasoff said. 

COVID-19 impact not included

Tarasoff said the proposed increase does not include the expected short-term impacts from COVID-19.

The city estimates the fiscal impact from the pandemic will be $16.8 million in 2022 and $10 million in 2023. 

To bridge that gap, Tarasoff said the city will have to reduce spending even more or get extra one-time funding from the province or the federal government.

"Over time hopefully those (COVID impacts) start getting phased out, but COVID is going to have a long-term impact on our budgets for probably at least five, or maybe even more, years."

City administration is giving budget recommendations for the next two years.

It's doing so because in 2019, council adopted a multi-year business plan and budget policy.

It instructs the administration to estimate expenditures and revenues required to maintain existing services, including committed costs and administrative priorities for the next two years.

Tarasoff said this budget recommendation is just the first step in a long process and could change.

City council will finalize the 2022-2023 budget during deliberations on Nov. 29, 30 and Dec. 1.