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Concrete and Asphalt to increase 20% in price in 2008

May, 09 2007

Brace for 'scary' tax hike: mayor Rising salaries, inflation may force 10-per-cent increase EDMONTON - Rising costs driven mainly by Alberta's economic boom could lead to a "scary" double-digit property tax hike next year, Mayor Stephen Mandel warned Tuesday. A report on the 2008 operating budget process shows Edmonton might need an extra $57 million to $76 million just to provide the same services it does now, with most of the increase caused by higher salaries and inflation. The price of materials such as concrete, gravel and asphalt is likely to go up 20 per cent in 2008, while the cost to lease space and hire security, and the cost of snow removal and other contractors could rise even faster, the report indicates. Mandel estimated this might mean an eight- to 10-per-cent tax boost, although more information should be available in August. "You're starting off with what I see as a substantial challenge," he told city manager Al Maurer during a council meeting. "Given the amount of it, it's going to be scary." Coun. Ron Hayter was also concerned, saying the "message I get from the presentation can be described in three words -- up, up and up. The pressures on citizens and council are going to be extreme." But Coun. Linda Sloan called the economic update "a wake-up call" for Edmonton. "We're moving into the big leagues ... it's unprecedented in our history," she said. "Maybe the ideology we have held as being a big city with a small-town approach, maintaining low taxes, cost cutting, some of those ideologies aren't going to serve us as well." In addition to preserving current services, the city will likely spend $17 million next year to deal with the expanded needs created by growth, as well as the cost of operating newly built facilities and roads. That money will come from the extra taxes paid by the owners of the new homes and businesses analysts expect to see constructed. Maurer cautioned these are preliminary figures. They're likely to be adjusted before the proposed 2008 budget is presented to council in November. Edmonton's overall tax hike this year is 4.95 per cent, although soaring prices meant total taxes for the owner of a typical single-family house went up 6.7 per cent. The report forecasts strong 2.1-per-cent population growth in Edmonton, but with unemployment staying low, the current labour shortages are expected to continue, making it hard for home builders and other groups to keep up with rising demand. That should add up to rising house prices, rents and wages, the report says. "It's a tale of two cities," budget manager Peter Tarnawsky said. "The positive is oil prices have rebounded and continue to be sustained. However, with the prosperity and opportunity in our community come challenges."