Property tax hike of up to 12% needed to balance City of Vancouver’s 2021 budgetSynergy Mortgage
[Daily Hive – October 31, 2020]
Vancouver City Council is facing some difficult choices ahead with the municipal government’s budget for 2021, based on a presentation city staff will be providing in a meeting on November 4.
Due to COVID-19’s continuing impact, revenues from programs and services, parking, license, and development will still be lower, yet there will also be rising costs related to the pandemic response, such as managing street disorder, homelessness, and the opioid crisis, as well as increased street cleaning.
A full year of operating costs in 2021 is anticipated from restarted programs and reopened facilities that were previously closed, including community and recreational facilities, and public libraries.
The city also considers initiatives and programs under “equity” and climate change action to be essential to the budget.
This past spring, the provincial government provided municipal governments across BC with the legal ability to run deficits in 2020 to help them manage their revenue shortfalls and maintain essential services. However, given that continued deficits are unsustainable, cities will be required to balance their budgets by the end of 2021.
Several possible budget and taxation scenarios, with the potential tradeoffs, have been drafted for city council’s consideration.
A 12% property tax hike would be necessary in 2021 to balance the budget, but only if the city does not draw from reserves.
City staff have indicated they are generally reluctant to depend on reserves, which are deemed as a one-time funding source, and a balance needs to be maintained to respond to future emergencies, such as snowfall response and the evolving nature of the pandemic. Over time, the reserve balances also need to be replenished.