No tax increase in this year’s Toronto budget
(Written for Town Crier Feb. 23)
The weather may have warmed up, but inside city hall council voted to freeze taxes on the first day of a four days of budget votes.
Mayor Rob Ford didn’t campaign on a tax freeze but he announced after the election a tax freeze was a priority.
“Taxpayers won’t have to pay a property tax increase this year,” Ford told the media.
After the vote Ford said that taxpayers sent a clear message during the election that they are sick and tried of wasteful spending at city hall.
“We saved $66 million in the first 100 days that’s more than the previous government saved in seven years,” Ford boasted to the assembled media.
The biggest saving came from canceling the vehicle registration tax as of Jan. 1, which gives taxpayers $64 million back, said Ford.
However, canceling the tax means the city will lose $48 million in revenue and it will cost the city/taxpayers $16 million to issue refunds to car owners who paid for the fee in advance.
“The way the mayor looks at it is it’s $66 million (overall) in taxpayers’ pockets,” said budget chief Mike Del Grande.
Councillors had spent the morning debating the merits of Gord Perks’ motion to add $3.582 million back to into the budget.
Perks wanted the extra cash so when councillors debate the operating budget they could choose to reverse proposed cuts such as closing the Urban Affairs library, reducing hours on dozens of buses and slashing the Tenant Defence Fund.
Perks calculated that his motion would have cost the average residential property owner an additional $3.75 this year. However, he didn’t receive enough votes for it to pass.
Not surprisingly, Perks was disappointed his colleagues didn’t vote for his plan.
“There are two reasons why we need it,” Perks told the media. “The first is we are losing some services that are important to Torontonians and I am disappointed the mayor and many of his allies voted to cut those services.
“The second reason is we are not always going to have reserves to draw on and the money we put aside last year and generated in 2010 that’s all gone now,” he said that cash was used to balance this budget.
“That means next year’s budget will be just awful,” said Perks. “The mayor is profoundly misleading Torontonians. He thinks he can generate $700 million in savings without having a profound impact on services.”
Perks said that under mayor Mel Lastman the annual structural deficit meant the city’s annual budget hole was about $1 billion, due in part to years of tax freezes.
Over the last seven years mayor David Miller brought down that number to around $500 million a year, said Perks.
“Mayor Ford’s budget has created the single biggest jump in that (structural deficit) number bringing it back up to $700 million. He’s increased it by 40 percent in one year,” said Perks.
City staff project a $774 million structural deficit in a report on the 2012 financial outlook. If there are surpluses in 2011 to offset next year’s budget pressures plus a property tax next year, the 2012 deficit will still be $530 million, according to city staff.