All citizens will be invited to a series of public consultations to discuss the challenges facing the City of Winnipeg and possible solutions.

Research by the City’s Administration shows that property taxes could be cut dramatically, business tax eliminated and bus fares greatly reduced under a New Deal scenario.

The old taxes would need to be replaced by new fees and levies tied to the cost of providing city services.

“That’s why we’re going to the public. We want to hear how they want to restructure the tax system so they can pay less in property taxes,” Mayor Glen Murray said.

“If they don’t like a particular proposal, we want to hear that. But there is no magic to this. If the public rejects every proposal for new revenue, then property taxes can’t be decreased. The more we shift to new fees and levies, the lower our property taxes could be.”

The City is considering a New Deal because of two serious problems it faces.

1. It relies on property taxes for 42 per cent of its revenues. Those revenues have been flat or declining for many years, while the City’s costs have increased.
2. The City’s roads, sewer pipes, bridges and transit system need renewal and replacement. That will cost $188 million more per year than the City currently raises.

Coun. John Angus, Chair of the Standing Policy Committee on Public Works, said a recent report received by his committee shows the gap between what the City needs to spend and what it can afford.

The City’s overall infrastructure deficit includes Public Works, Transit and Water & Waste.

“These large gaps in funding for maintenance and capital projects demonstrate that our current tax system will never be adequate to build the kind of city that we want and need. We require dedicated revenue sources in order to pay for both the repairs of existing roadways and bridges and the building of new ones. This is why our early proposal of a New Deal for the City is so timely,” Coun. Angus said.

Coun. Bill Clement, Chair of the Standing Committee on Fiscal Issues, said the City has worked hard to reduce its own spending.

“All three major bond rating agencies have raised our credit rating in the last two years. Standard & Poor’s, for instance, said the City’s ‘marked improvement in the debt profile has taken place against a backdrop of steady economic growth, declining tax- and self-supported municipal debt, rising liquidity, and solid budgetary performances.’ ”

Research by the City Administration found a number of Canadian and American cities use other sources of revenue to replace property taxes in their jurisdictions.

If Winnipeggers adopted some of the sources of revenue used in other cities, they could cut their property taxes in half and still have more money to repair and replace roads, the research shows.

At the same time, the new sources of revenue would be tied to the costs of providing city services.

Some of the fees that were studied would give taxpayers a say in what they pay based on their decisions as consumers.

For example, a gasoline tax could be used to pay for road repairs. A commuter choosing to walk, cycle or take the bus to work would pay less gasoline tax, reflecting his or her reduced wear and tear on the roads.

Early ideas on a New Deal package shared with the public today showed the City could:

• Cut property taxes in half
• Eliminate business tax and reduce business property tax
• Cut bus fares in half
• Freeze City recreation fees at current rates
• Reduce other user fees
• Eliminate the amusement tax

Those cuts could be made if the City could also:

• Increase frontage levies · Increase Water/sewer rate
• Introduce a garbage fee
• Levy its own sales tax
• Levy liquor tax as it did in the 1920s
• Levy a tax on hotel rooms
• Add a telephone line fee to fund 911 service
• Increase traffic and building code enforcement fines to cover 100 per cent or more of the cost of enforcement
• Levy its own fuel tax and share in the federal government fuel tax
• Increase its current tax on natural gas and electricity
• In lieu of current provincial grants, the province could share sales tax and income tax revenue with the City

Under an early New Deal model, the City could raise an additional $120 million per year. That money could help the City begin to repair and replace roads, sewer pipes, bridges and the transit system.

Many of the new fees and levies would be tied to economic growth, so they would increase over time, providing the City with more money to reduce and eliminate the infrastructure deficit.