Councillor Pledges No New Tax Hikes

Council voted Monday to reduce the 2026 property tax rate to 4.9 per cent. (Photo Kelly Allard)

City council will be reducing 2026 property taxes despite recommendations to raise them following a bylaw ammendment during Monday’s regular meeting.

Staff had recommended a half percent increase to the 5.6 budgeted rate for 2026 but council took a different direction with a reduction to 4.9 per cent.

Councillor Cheryl Phaff stated categorically Hatters won’t be paying a higher rate than 4.9 per cent.

“If you’re looking for a headline, ‘4.9 per cent increase is high-water mark,” Phaff told reporters following the meeting.

She also acknowledged her campaign pledge for zero percent increases but stated this council is stuck with the budget formulated by the last council.

Councillors stated both during the meeting and in comments following that spending reductions will be found by reducing expenses. But they acknowledged they have yet to specifically identify where those cost savings will come from. That’s expected to come through a newly formed budget committee that will be tasked with finding savings going into the 2027-28 budget.

Expenses for 2026 are expected to actually increase with city firefighters having yet to agree to a contract with the last one expiring at the end of 2022.

Those costs will be at least $175,000 per percentage point increase in firefighter wages for each of the four years currently outstanding up to 2026.

Coun. Ted  Clugston said budget amendments will be required to deal with the upcoming shortfall.

“I can almost guarantee that” said Clugston.

But he also highlighted the rise in overall city spending over the past four years, noting a more than 36 per cent increase but tempering the financial situation Medicine Hat is facing by remarking the municipality has more than $800 million in reserves.

Clugston, along with Coun. Brian Varga and Phaff voted against the bylaw amendment which reduced this year’s property tax. He explained the reasoning of the move was due to objections that the cuts to the rate didn’t go far enough and added taking property taxes down to 1 per cent could have been achieved by accessing an additional $4 million or so from reserves.

“I respect council’s decision though. Dipping into reserves is a very difficult to do,” he said.

Clugston said the city needs to re-evaluate its finances with more attention put towards its expenses.

Coun. Bill Cocks went a bit further than his colleagues in identifying possible areas to do just that, stating staffing levels is an area he’d like more examination.

“Generally speaking, I’m thinking we have to cut back on the number of employees that we have,” he told the Owl, adding that’s only a preliminary viewpoint. “I think we need to reduce our workforce. That accounts for the major part of our expenses and that’s how I think we’ll find some savings.”

Council will be meeting again this month with April 27 the next scheduled sitting.