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In these low days of gaping budget shortfalls and suffocating fiscal restraint, politicians are supposed to present budget numbers with the solemnity of funeral-home directors.

Winnipeg's mayor missed that memo.

Sam Katz beamed yesterday as he announced that the city would forgo a property-tax hike for the 13th consecutive year, a move unparalleled anywhere else in the country.

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"We believe it's the right thing to do," he said. "What's gone on in most other cities in North America has not impacted us as great, and that's why we've been able to avoid recession."

The property tax freeze was first championed under mayor Glen Murray - the newly elected MLA for Toronto Centre - as a way of squeezing more money from the federal and provincial governments and lowering Winnipeg's bloated tax burden.

Since then, the city's tax rate has plummeted to among the country's lowest, yet the freeze has remained a civic obsession.

Mr. Katz's critics charge that his annual budgetary magic trick has left the city in a huge long-term hole.

"He can't just pull this rabbit out of the hat around budget time every year without a huge impact on our inner city and our infrastructure," said Councillor Jenny Gerbasi. "We have a core that's rotting, a downtown that's stagnant."

The mayor outlined an $818-million preliminary budget with significant tax cuts for small businesses and more cash for paramedics, police, libraries and Assiniboine Park, the city's deteriorating recreational jewel.

While last year's budget forecasted a $60-million hole this year, Mr. Katz managed to patch it up with a combination of land sales, carried-over surplus, increased government grants, increased utility revenue and a controversial $10.6-million influx the city is trying to wring from Manitoba Hydro in a taxation dispute.

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"It's scrounging one-time revenues," Ms. Gerbasi said. "Selling land to pay the budget? That's a problem. If we have extra capital it should be used to pay our serious infrastructure deficit. This is all a bit of smoke and mirrors."

Winnipeg's unmet infrastructure needs have been pegged at anywhere between $1-billion and $7.4-billion.

"You need only drive down any downtown street to realize that the infrastructure is in serious need of repair," said Christopher Leo, a political science professor at the University of Winnipeg. "This property tax freeze has become some kind of holy writ, and it's quite obviously coming at the expense of other parts of the city."

The mayor has often stated that a 1-per-cent increase in property taxes would generate $4.1-million in revenue. And considering 2010 is an election year, Mr. Katz isn't willing to trade any dip in his approval rating for such a meagre sum.

"This is not a time to dip into people's pockets and take money away," said Councillor Scott Fielding, chair of the city's finance committee.

Should he win the mayoral race this fall, Mr. Katz's balancing act will take on daunting new proportions in coming years. Yesterday's preliminary budget anticipates a $77-million deficit in 2011 and a whopping $119-million shortfall in 2012.

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"Obviously if there's a shortfall in revenue, we are going to have to replace that," he said. "We need to look for new legitimate sources of revenue."

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