Toronto council budget gap widens to $124 million
City manager Peter Wallace tells budget committee it is up to councillors to decide how to fund new spending.

thestar.com
Dec. 15, 2015
By David Rider

Toronto’s budget committee has been handed a staff-proposed budget that does not include $67 million in previously identified priorities for TTC, social housing, poverty reduction and more.

On top of that is $57 million in council-approved spending that is in the budget but unfunded, widening Toronto’s operating budget gap to $124 million.

“We feel that the core decisions about what the property tax rate should be, and, in particular, what incremental savings or additions should be made...is a city council responsibility, something you as elected representatives will want to undertake,” city manager Peter Wallace told the budget committee Tuesday.

Unfunded items include several trumpeted by Mayor John Tory, such as an earlier start for Sunday subway service ($9.6 million next year and $23.8 million per year after) and $13.7 million in accelerated building repairs recommended by Tory’s task force on Toronto Community Housing. Poverty reduction funding is $6 million less than the initiatives announced, while $1.6 million would be saved by cancelling a plan to expand a free-breakfast program to some schools in low-income areas.

Wallace, a former top provincial civil servant, also included in the budget an assumption that land transfer tax revenues will remain indefinitely at a record-high $525.5 million. Reducing that estimate, as a cushion in case of a real estate downturn, would put even more pressure on the bottom line.

For residential property tax increases, staff recommended two possibilities: one with a 2.17 per cent hike and another limiting the rise to 1.3 per cent. The actual amount will be set by council when the final operating and capital budgets are approved in February.

The proposed budget includes a $75 charge on the land transfer tax to cover the cost of provincial electronic registration, which the city formerly subsidized. It would also eliminate the rebate for the largest garbage bins, hiking the cost of those bins by $124.48 to $468.08 a year.

“This is the beginning of a process and not the end,” Mayor John Tory told the Star’s editorial board Tuesday as the staff-proposed budget was presented. He identified the funding gap as $23 million - the shortfall only within the proposed budget after a hypothetical 1.3 per cent property tax hike.

“If you want to add something (to the budget) because you think we left something out, that's no problem. Tell us what you'll take out,” he said. “This is not decorating a Christmas tree where you just get to put stuff on and just say, 'Well we'll just add that on and somebody, somehow will pay for it.’ This is real people that have to pay for this.”

Councillor Mike Layton scoffed at a Tory-led proposal to find savings through a freeze on staff travel and office supplies.

“We should be focusing on making sure people have warm places to stay and people can get around efficiently,” the budget committee member said, referring to unfunded pledges to keep winter warming centres for the homeless open longer and improve transit.

Layton also said it’s “dangerous” to budget for record-high land transfer tax revenues. The city manager previously said Toronto has been a “free rider” on that cash injection and he wants council to debate how to reduce that reliance.

“We heard it's a risky form of revenue to rely on, and yet so much of the (proposed) budget will be dependent on it.”