Council approves budget with 3.58-per-cent property tax hike, limited increase in service and a $79-million hole in it
Thestar.com
March 8, 2019
David Rider, Jennifer Pagliaro
Mayor John Tory and his allies fended off several attempts at increasing spending on services for youth, additional library hours and other initiatives, as council signed off on a budget that fulfils his promise of relative austerity.
As approved by council earlier on during the day-long debate, Toronto homeowners will pay a total of 3.58 per cent more in property taxes this year, or an extra $104 for a total bill of $3,020 of an average $665,605 home.
Mayor John Tory’s proposed tax hike was approved by a 21-4 vote Thursday. The mayor chats with Councillor Frances Nunziata, council speaker.
City council approved Tory’s proposed hike -- 2.55 per cent, plus the continuing levy to fund housing and transit projects -- by a 21-4 vote.
The operating budget has a $79-million hole in it.
This consists of $45 million requested from the federal government, which has not been committed to the funding, and another $34 million in unspecified cuts.
Council approved separate increases of 3 per cent, or $27 per household, for water usage and 2.2 per cent for garbage and recycling collection later Thursday evening.
Increasing property taxes at the rate of inflation, council debated what should be included and who would be served under tax rates kept well below those of other municipalities in the GTA, Hamilton and Ottawa.
“Many of you, including the mayor, have spoken about the burden taxes are on Toronto families and that we must keep our city affordable,” said Councillor Mike Layton (Ward 11 University-Rosedale). He said this is a goal he shares.
“Where I think we disagree on the budget is who we should be making our city affordable for.”
He urged his colleagues to consider the possibility of reinstating a charge on vehicles scrapped under the Rob Ford administration. He noted years of transit fare increases -- another 10 cents added this year -- while property taxes are kept low for homeowners.
That decision, he said, disproportionally affects vulnerable people, such as single moms struggling to afford food, childcare and getting around the city.
“So let’s be honest with ourselves and Toronto residents: You are fighting to make life affordable for some, but at the expense of others.”
Attempts by centrist and left-leaning councillors to boost the annual rate hike by extra amounts ranging from 0.002 to 2 percentage points failed, with Tory’s council allies standing firm behind his plan and anywhere from five to eight councillors voting for the bigger hikes.
Tory, speaking to reporters before the meeting, said his fifth city budget strikes the right balance, imposing neither “service shock” in the form of cuts, nor “sticker shock” with a tax bill dramatically outpacing inflation.
“This budget moves our city forward in a balanced, responsible way,” said Tory, who added he was given a “very strong mandate” from Torontonians in last fall’s civic election to continue the strategy.
In his speech to council later, he highlighted what he said is a need for other governments to invest in the “economic engine” of the country.
Council spent the rest of Thursday debating what gets funded in budgets set, including senior government contributions, at $13.5 billion for city operating expenses, including services and staff costs, and $40.7 billion for capital spending, on roads, bridges and other hard costs.
Several attempts at adding new spending failed to get past the mayor and his allies. These included a failed attempt by Councillor Josh Matlow to have eight additional youth hubs -- safe spaces for young people to hang out, get homework help and mentorship after school in low-income neighbourhoods.
A spike in violence last year saw 41 homicide victims under the age of 30, not including those of the Yonge St. or Danforth attacks.
Tory and every member of his inner circle on executive committee voted against the additional hubs.
Two were funded in this budget.
Councillor Gord Perks told council that Tory’s argument that keeping property taxes low makes Toronto more affordable is dead wrong.
Hiking taxes to fund more services for low-income residents, including many TTC users and Toronto Community Housing residents, is the way to do the most good, Perks said.
“We are falling behind,” funding the booming city, said Perks (Ward 4 Parkdale-High Park), who noted that per-capita spending on city services has dropped in recent years, while the need for homeless shelters, subsidized child care and affordable housing is steadily rising.
That spending has fallen by $205 per resident since 2010, when accounting for inflation and population growth, according to a city staff presentation. That is despite more than $60 million in new spending approved by council on Thursday.
Speaking to reporters, Tory defended the hole ($79 million) in the budget, saying he was “optimistic” based on talks with the federal government, including Prime Minister Justin Trudeau, that money requested for sheltering refugees will flow.
He said he wouldn’t have budgeted for the cash if he didn’t think he could get it.
City manager Chris Murray was willing to entertain the idea of Ottawa saying ‘no,’ and said to council that, if that happens, he will come back with another revenue source to address it, likely a rainy-day reserve fund.
By law, all Ontario municipalities must pass balanced budgets with no deficits.
“This is a balanced budget,” Tory’s budget chief Councillor Gary Crawford said ahead of the vote.
Councillor Shelley Carroll disagreed.
“It’s only balanced if you don't look too hard.”
For the first time, they supported a motion from Layton to implement a six-year plan that will ensure full cost recovery from industrial wastewater polluters.
One of the major challenges facing council this year was reversing a reliance on a hot housing market, as sales sagged in 2018, leaving a shortfall staff recommended covering, in part, by reducing how much money is forwarded from the city’s general operating revenues to the capital plan.
