The $11 billion city budget Toronto council approved this week included a 2.1% residential property tax hike for homeowners, no hike for tenants and some $50 million in new spending.
Mayor John Tory called it a Goldilocks Budget, meaning it was “just right” in its balance while Councillor Mike Layton evoked the Three Little Pigs, saying the budget in fact was “made of straw.”
And while a budget that pleases no one arguably serves everyone best — the left in this case wanted to tax and spend more and the right wanted lower taxes and more cuts — it’s tough to see the happy ending to Toronto’s ongoing budget problems.
This city now spends more on programs annually than the province of New Brunswick (at $9.4 billion) and almost as much a Manitoba ($13.8 billion). Once all spending is accounted for, including debt repayment, Toronto’s total expenditures amount to $12.97 billion.
However, unlike provincial governments, the City of Toronto can’t rely as much on federal transfer payments and provincial help is spotty and capricious.
Hence the mess that is Toronto’s overcrowded transit system and congested streets, the run-down disaster the city calls social housing, the overburdened shelter system that struggles to house refugees and the homeless from surrounding Greater Toronto Area cities and towns.
The growth in spending hasn’t resolved chronic program and service problems – for example thousands of TCHC units sitting vacant because there’s no cash to fix them or address the 180,000-plus waiting list for subsidized housing.
The reality is that yes, this week’s budget came in close to Toronto’s inflation rate. To do that, council needed $505 million from reserves. However, with a new city building levy for transit and housing projects and other assessments, the actual property tax increase was just under 3%.
At the same time, the budget is dangerously dependent on house prices staying high to keep the Municipal Land Transfer Tax golden goose laying eggs and inflation staying low (city debt stands at $977 million and rising and now eats up 9% of the overall budget).
Meanwhile, council is nowhere near finding the billions needed for new transit and other infrastructure.
A fairy tale budget for sure, but a fractured one.
Source:: Toronto Sun – Movies