Councillors cry foul over 2016 city budget

Critics slam executive’s quick approval on property tax, say more debate needed on hike

Thestar.com
Feb. 9, 2016
By Jennifer Pagliaro

With warnings of “storm clouds ahead” over the city’s finances, Mayor John Tory and his executive approved the 2016 budget and an inflationary property tax hike with little amendment or debate on Tuesday.

That budget has now been punted to council for final approval next week, when a showdown is expected between Tory’s backers and left-leaning councillors over how to raise the money the city needs.

Tory said he’s “proud’ of what’s being put forward.

“Is it perfect, is it everything we’d want? Well, of course not. I don’t think there is such a budget that could be everything everybody wanted and satisfy everybody,” he said. “The reason I’m proud of it is because it strikes a balance between investing in people in the city and at the same time respects the fact that property taxpayers alone cannot and should not bear the full brunt of financing every social and physical investment that we recognize we might like to make in our city.”

Before the meeting really got going on Tuesday morning, the executive approved increased property tax rates at a total 2.69 per cent - including a 0.6 per cent increase to help pay for the yet-to-be-decided transit plan for Scarborough - without taking questions or having a debate. Tory has promised to keep property tax increases at or below inflation.

Councillors not on the executive committee accused Tory and team of rubberstamping a budget that uses one-time measures to balance the books.

“I’m alarmed. This is the first time in 20 years of watching council and 10 years of being on council where the executive committee and its predecessors didn’t even debate the tax rate, they just approved it without question,” said Councillor Gord Perks. “I expect there will be a very vigorous debate on council.”

On Tuesday, top city staff detailed the risks and challenges involved in balancing this year’s $10-billion operating budget, while warning of a cash flow issue for 2017.

City manager Peter Wallace forecasted “storm clouds ahead” when he told executive that the one-time balancing measures this year - which include taking $12.5 million from a housing reserve fund and $4.6 million from a daycare reserve - leave the city with added pressures next year. And after it was heavily relied upon in the proposed 2016 budget, council should not expect another increase in revenue from the municipal land transfer tax next year, Wallace said.

As the city’s biggest line items - $1.8 billion for the TTC and $1.1 billion for police - continue to balloon, the city will need to consider “revenue tools” - new and increased taxes - immediately, Wallace said.

That cloud is expected to hang over budget talks next week and into the future.

Councillor Janet Davis said the city needs to talk seriously about taxes to build a better budget.

“To once again, one more year, draw significantly on reserves without a commitment to looking at long-term, sustainable approaches to our budget is actually quite irresponsible,” she said. “We can’t continue to pretend we can build a city by drawing continually on the savings account.”

She said millions worth of unfunded improvements proposed by council but not included in this budget could have been covered by a “small tax increase.” A one per cent property tax hike in 2016 would bring in about $25 million.

“The fact that your city manager tells you you have storm clouds and you walk by the umbrella store and don’t buy one isn’t all that wise,” Perks said.

Earlier Tuesday, Tory tried to take the steam out of a protest “bake sale” at city hall by anti-poverty advocates, who said his proposed budget provides only crumbs to help Toronto’s poorest residents.

“I am proud of the initiatives that we are putting forward by way of anti-poverty measures,” such as continuing to offer children free rides on public transit, said Tory, joined by Crawford and Deputy Mayor Pam McConnell, as they served eggs and toast to students for a free-breakfast program at Thorncliffe Public School.

“We are repeating, in the budget, $26 million in new investments that were begun last year.”

McConnell, who spearheaded council’s poverty reduction strategy, also defended the budget, saying there are two important components: $5 million to $6 million in new money, on top of other anti-poverty measures embedded in divisional budgets.

After the vote on Tuesday, Crawford the focus right now is on getting this year’s budget approved, but acknowledged there’s a bigger discussion ahead.

“We have passed and we will pass an affordable budget this year, and I think that is commendable under the economic circumstances,” he said.

Both Crawford and Deputy Mayor Denzil Minnan-Wong said that while finding new revenue is important, the city still needs to look at cutting the size of government and expenses.

“Fundamentally, before you look at revenue tools, or at least at the same time, you’ve got to go to the public and say, we’re doing as much (as possible) to squeeze those efficiencies out,” Minnan-Wong said.