(File photo)
City of Red Deer administration released the draft 2025 Tax Supported Operating and Capital Budgets, with a recommended tax increase.
To balance the budget, a tax hike of 11.25 per cent has been proposed and will be debated from Nov. 18 and 22.
The proposed 2025 Operating Tax Supported budget is $512,371,612 and to balance the budget just over $18 million in changes is required.
“As we’ve been signaling throughout the year, our city is facing significant financial pressures as we approach this budget,” said Mike Olesen, Growth and Finance General Manager. “Simply put, our current path remains unsustainable and it’s critical that we change our course to ensure our long-term financial health. The budget we are presenting is reflective of this urgency and considers the options available to council to balance the budget.”
Related stories:
- Red Deer City Council delays Capital Budget
- Red Deer City Council exploring ways to balance 2025 Budget
After a review and analysis through the budget process, city administration is recommending the following directions be considered by Red Deer City Council:
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Generate gross tax revenue increase of $18 million: A projected $18 million boost in tax revenue will help address past financial challenges and support a more forward-focused approach. This represents an 11.25 per cent tax increase.
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Prioritize Services: By approving proposed service level adjustments, the city could reduce expenses by approximately $3.4 million, focusing resources on core municipal functions that matter most to Red Deerians.
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Organizational Efficiency: Administration will continue efforts to assess and optimize resource efficiency, laying the groundwork for long-term cost management.
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Achieve a Positive Variance in 2025: The city aims for a positive budget variance by year-end 2025, which will contribute to building reserves through one-time savings.
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Focus Advocacy on Future Funding: Red Deer will emphasize advocacy efforts at the provincial and federal levels to enhance support for municipal infrastructure and growth, ensuring future sustainability.
“We have fallen behind. This is due to years of low tax rates that have not kept up with the increase to our expenses, compounded by reductions in revenues and grants. Increasing our tax rates, would still have Red Deer competitive with lower tax rates than the peer cities,” said City Manager Tara Lodewyk. "We are at a pivotal point where we can close the gap that has been created or continue to fall further behind. We are repeating history. Our history has shown that when we hold tax rates low by using reserves, we end up facing larger increases in the following years and taking reserves to critical levels. Administration is proposing reducing expenses by $3.4M in 2025 and is committed to continuing to find ways to save dollars to help close the gap and to create a path toward sustainable finances for Red Deer.”
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