Council votes to put $52M tax surplus toward flood relief

City councilhas voted to spend $52 million in surplus tax revenue on repairinginfrastructure damaged intheflooding that devastatedCalgary last month.

After a lengthy debate on Monday, councillors voted 11 to fourin favour ofspending this years extra money on flood relief.

• Spend $52M tax surplus on flood rebuilding, Nenshi advocates
• Returning $52M in taxes topped Calgary poll

Mayor Nenshi wanted to set aside $52 million this year and next for uncovered flood expenses, but Ald. Shane Keating suggested a popularcompromise that will earmark this year's funding for flood relief and put off a finaldecision on next year's surplus until the budget debate in November after the civic election.

"I think council made the right decision today and I'll stand by that," Nenshi said. "People have the opportunity to vote to determine whether they believe that or not."

City officials will bring a list of flood repair priorities to council inSeptember and any leftover money will be spent on flood prevention, he said.

Flood costs rise

Council heardMondaymorning that the city's flood costs have ballooned to $500 million and that number is expected to increase once the total scope of damage is evaluated. The federal and provincial governments are expected to cover much of the costs, but not all.

Some aldermen arguedMondayagainst spending the surplus. They said the money should be given back to homeowners through a future property tax reduction because the city has other options, including $300 million in reserve funds it can tap for flood costs.

"It's very disappointing," said Ald. Diane Colley-Urquhart. "[Although] my amendment failed to give the money back to Calgarians, the fact of the matter is this will be an election issue. I'm confident about that. People will have to stand up and clearly articulate why they didn't give this money back."

The extra moneymaterialized after the city absorbed the unused portion of the provincial education property tax.

Before the flood disaster, Nenshiundertook a public consultation processto gather ideas on how to spend the extra cash.

Reaction mixed

Derek Fildebrandt with the Canadian Taxpayers Federation believes the money will end upbeing a permanent tax hike.

"Voting to make the $52 million a two-year spending project, then review the possibility of giving it back after that everybody sees through this," he said.

"This is a plan to make this a permanent part of the budget, to permanently raise taxes, to take money from taxpayers that the province intended would stay in the pockets of taxpayers."

But resident Yulie Escobar thinks it's a good idea to put the money towards flood recovery, but he would like to see some of it go to the people whose houses were affected by flood damage instead of city infrastructure.

"They need help," he said.