WINNIPEG, MB – The 2019 preliminary operating and capital budgets for the City of Winnipeg tabled at a special Executive Policy Committee meeting today respond to provincial funding uncertainty with a balanced and accountable approach Mayor Brian Bowman said today.
“Preparing this year’s budget was complicated by ongoing uncertainty regarding provincial government funding support to the city,” said Mayor Brian Bowman. “I fully support the provincial government’s efforts to eliminate its budget deficit, but I don’t believe this should be achieved on the backs of Winnipeg property taxpayers. As such, the preliminary budgets being proposed today for the public and Council’s consideration reflect a balanced, disciplined, and accountable response to this uncertainty.”
The Mayor said a healthy amount of uncertainty remains with respect to the level of provincial capital funding that will be provided to the City of Winnipeg in 2019.
Provincial capital funding support in 2019 is expected to be limited to meeting provincial cash flow commitments for existing capital projects such as the Waverley underpass and bus rapid transit. Funding in 2019 for regional and local roads is expected to be limited to only those commitments made under the Accelerated Regional Road Program.
These limits on funding, together with the provincial decision to not fully fund capital commitments for roads in 2018, mean the regional and local road program in 2019 is budgeted to be $86.4 million. This represents a significant decrease from previous years, and the lowest regional and local road budget since 2014.
The Mayor said the more responsible way to address the shortfall is to reduce the number of road projects rather than ask Winnipeg residents to pay a 7.1 percent property tax increase or incur additional long term debt to make up shortfalls in provincial capital funding for roads in 2019. The Mayor also said it would be irresponsible to budget beyond 2019 expecting the provincial government shares the city’s priority to fix Winnipeg’s roads.
“This is the city’s new reality,” said Mayor Bowman. “I accept that reality. And our preliminary capital budget and five-year capital forecast reflects that reality in a responsible and accountable way moving forward.”
The preliminary budget and five-year capital forecast for the city’s regional and local road program only reflects provincial capital support that has been committed under the Accelerated Regional Road Program. This means the historic, $976 million road renewal plan approved by Council in September 2018 would be reduced by $175 million totaling $801 million over six years.
It will also mean less investment in the pedestrian and cycling program in 2019 and beyond.
About $3 million is proposed to be invested in various sidewalks, bike corridors, and recreational walkways in 2019. This represents a program decrease of $2.7 million from what was projected to have been invested in 2019 as part of the 2018 capital budget, and $17.5 million less over six years.
“Unfortunately, this will mean fewer road, cycling, and pedestrian projects will be undertaken this year compared to last year,” said Mayor Bowman. “And it also means fewer projects will be undertaken in future years.”
Overall, this year’s tax supported operating budget proposes to limit operating expenditure increases to 3.9 percent when compared to last year’s budget. The majority of this increase is to fulfill obligations under city’s existing collective agreements across multiple departments.
The 2019 preliminary budgets propose to limit property tax increases to 2.33 percent, and dedicate the entire increase to addressing Winnipeg’s infrastructure requirements.
Two percent of the proposed 2.33 percent property tax increase remains dedicated to rebuilding and repairing regional and local roads. The other 0.33 percent of the proposed increase remains dedicated toward the completion of the Southwest Rapid Transitway. This increase means the average homeowner will pay an additional $40 in municipal property taxes in 2019.
No new fees are proposed in the 2019 budget. No increase is proposed to water and sewer rates. No increase is proposed to the frontage levy rate. No increase is proposed to parking rates.
The water and sewer dividend rate is proposed to decrease from 12 to 11 percent of budgeted water and wastewater sales. This is the first time in the city’s history that the water and sewer dividend has been reduced allowing additional resources to be made available to help fund significant upgrades to Winnipeg’s wastewater treatment infrastructure mandated by the Province of Manitoba.
The 2019 budgets propose a vacancy management target of $18 million to be shared by all departments. Vacancy management is not proposed to involve any layoffs of current city employees. The 2019 preliminary budgets also reflect a total of just under $12 million of efficiency savings to be held corporately as well as $1.6 million of expenditure management savings to be allocated among all departments on a pro rata basis.
To continue powering the economy and reduce the burden on small businesses, the preliminary budget proposes to reduce the business tax from 5.14 percent to 4.97 percent and increase the business tax threshold from $33,300 to $33,900 in 2019.
The Mayor noted the business tax rate proposed in 2019 represents almost a 13 percent decrease from 2014, and a further step toward its eventual elimination.