C2020-0742 ATTACHMENT 3 TAX Financial Task Force Report and RecommendationsTAX TAX C2020-0742 Attach 3 ISC: Unrestricted C2020-0742 ATTACHMENT 3 Organization of the Report Table of Contents Contents Organization of the Report .....................................................................................................................................2 Table of Contents ..........................................................................................................................................................................................2 Summary of Key Messages........................................................................................................................................................................4 Mandate, Focus and Acknowledgement ...............................................................................................................5 Mandate and Responsibilities of the Task Force ................................................................................................................................5 Reasons for More Focus on Funding Flows relative to Spending Discipline ...........................................................................5 External Members of the Task Force ......................................................................................................................................................5 Members of City Administration that offered Subject Matter Support ....................................................................................5 The Context for Funding City Operations ..............................................................................................................6 Sources of Operating Dollars ....................................................................................................................................................................6 Uses of Operating Dollars ..........................................................................................................................................................................9 Evolution of Municipal Taxation Policy in Calgary ..........................................................................................................................10 The Important Role of Property Taxes ................................................................................................................................................10 Textbox 1: Existing Taxation Authority Outside Property Taxes .................................................................................................13 Using Property Assessments to Inform Property Taxation ..........................................................................................................13 Responding to Calgary’s Cyclical Economy using Existing Tools ...................................................................... 15 Increasing focus on evidence and monitoring ................................................................................................................................15 Enhancing practices and processes that use existing revenue authority .............................................................................15 Textbox 2: Independent Review of Non-Residential Assessments and Complaints ..........................................................16 Measures Proposed by the Task Force.................................................................................................................................................17 Improving the Understanding of Municipal Finance Circumstances ............................................................... 19 Achieving a Better Understanding of the Property Tax Bill .........................................................................................................19 Responding to an Increasing Municipal Fiscal Imbalance ..........................................................................................................19 Measures Proposed by the Task Force.................................................................................................................................................20 Supporting Regional Economic Development ................................................................................................... 22 City-Shaping and Building in a Regional Context ...........................................................................................................................22 Assessing the Impact of Activity in the Region on The City’s Financial Position .................................................................22 Measures Proposed by the Task Force.................................................................................................................................................22 Bringing Property Taxation into the Twenty-First Century ............................................................................... 24 Reducing Reliance on a Land and Property-based Approach to Taxation ............................................................................24 Growing the Size of Non-Residential Accounts ...............................................................................................................................24 Addressing inflexibility in Non-Residential Sub-Classes ..............................................................................................................24 Changes in Market Values resulting from Gentrification .............................................................................................................25 Measures Proposed by the Task Force.................................................................................................................................................25 2 Financial Task Force | Report and Recommendations C2020-0742 ATTACHMENT 3 Organization of the Report Preparing for changes that would occur as the economy evolves ................................................................... 27 The Emergence of the Rapidly Growing Digital Economy ..........................................................................................................27 Municipal Revenue Opportunities available through the Digital Economy ........................................................................27 Measures Proposed by the Task Force.................................................................................................................................................29 Making Calgary More Competitive, Livable and Attractive .............................................................................. 31 Tax Competitiveness and Livability ......................................................................................................................................................31 Adding stability to tax competitiveness to build credibility and trust of private capital .................................................31 Building capacity to offer relief when prevailing economic conditions demand it ..........................................................32 Measures Proposed by the Task Force.................................................................................................................................................33 Working Better with Partners in Achieving Progress ........................................................................................ 35 Improving working relationships with a province that prefers few fiscal tools ...................................................................35 Improving working relationships with local businesses ..............................................................................................................35 Measures Proposed by the Task Force.................................................................................................................................................38 Improving Tax Efficiency for Long-Term Fiscal Sustainability .......................................................................... 39 Opportunity to enhance management of City financial resources ..........................................................................................39 Identifying early signals of the urgency for tax reform .................................................................................................................39 Adequate consideration for the volatility impacts on taxpayers ..............................................................................................39 Measures Proposed by the Task Force.................................................................................................................................................40 Annex 1: Recommendations for COVID-19 Relief Measures ............................................................................. 43 Annex 2: Overview of Municipal Revenue Tools in Other Jurisdictions ........................................................... 52 Revenue Sources in Other North American Cities ..........................................................................................................................52 Financial Task Force | Report and Recommendations 3 C2020-0742 ATTACHMENT 3 Organization of the Report Summary of Key Messages Key Message I: Adopt an evidence-based approach to decision-making .................................................................................................... 17 Key Message II: Anticipate and respond