The same mind-numbing debate happened several times last year, before council finally agreed in June to create a $130-million rebate program to cap non-residential property tax increases at 10 per cent.
But the intervention only came after a tax rebellion erupted when the annual bills went out, as 8,000 commercial properties initially faced double-digit increases. Several-hundred business owners and their supporters descended on city hall one summer morning to call for action.
The last-minute assistance program in 2019 followed on the heels of a $45-million relief initiative for businesses in 2018 — and a $41-million Phased Tax Program (PTP) in 2017.
All of these programs were supposed to be temporary.
Yet, they didn’t actually address the underlying problem at play: a major realignment in downtown property values caused by lower energy prices, fewer jobs in the core and rising vacancy rates.
A steep drop in the value of downtown office buildings shifted about $250 million of taxes on to businesses operating outside the core, causing taxes to soar at some strip malls, retail and other commercial properties.
At Tuesday’s meeting, the committee backed another temporary program, limiting commercial property tax increases to 10 per cent from last year’s levels, a move that should help about 5,000 eligible properties.
But the concept didn’t come before another round of hand wringing.
“What is the definition of insanity … doing the same thing over and over again and hoping for a different result,” Mayor Naheed Nenshi told reporters after the meeting, when asked about his colleagues’ trepidation about the latest proposal.
“We know the PTP is imperfect. Last year I stood up and said the PTP is imperfect, let’s find a better solution. We did not find a better solution.”
The latest program will be funded by $10.6 million unused from last year’s rebate system and $19 million from the city’s fiscal stability reserves.
The proposal will go to city council next month for a final decision, where it will face more scrutiny and debate.
“This current process, where it’s crisis after crisis and Band-Aid after Band-Aid, it’s four years that this has been going on … it has to stop,” said Coun. Jeromy Farkas, who voted against the program.
“We need to address this once and for all. And there’s no other way around it besides significant reductions to our spending.”