The way we talk about Toronto’s budget makes no sense - let’s change it


Metronews.ca
March 3, 2015
By Matt Elliot

Midway through the morning session of Mayor John Tory’s executive committee meeting yesterday, I had a revelation about Toronto’s budget: none of this really makes any damn sense.
The moment came during City CFO Rob Rossini’s presentation to the mayor and councillors on the subject of current value assessment, or CVA. CVA is the incredibly complicated process through which the property tax percentages talked about at city hall get translated into the real numbers residents see on their tax bills. It’s rife with arcane detail - class shifts, assessment phase-ins, provincial policy, a colourful map.

It’s the municipal equivalent of the Cones of Dunshire. It’s punishingly intricate.

As a result, very few people fully understand it - not most city councillors, not journalists and certainly not the average resident.

But without a full understanding of how the CVA process works, all the talk of property tax rates that comes up during municipal budget season is basically useless. Politicians spend an inordinate amount of time talking about figures that, in practice, mean very little to their constituents.

At budget consultations and town halls over the last few years, I’ve seen people continually struggle to understand what exactly the municipal budget means to them. I’ve heard people tell me with confidence that the 2.25 per cent property tax “rate” in this year’s budget means that their tax bill will be 2.25 per cent of their home’s total assessed value. That’s wrong. I’ve also heard people say, with even more confidence, that a 2.25 per cent property tax increase means their tax bill will be exactly 2.25 per cent higher than it was last year. Also wrong, because of the CVA.

This needs to change. Politicians at city hall spend too much time talking about property taxes in ways that people can’t possibly understand. Worse, they do so at the expense of the other parts of the budget that affect people just as much as property taxes.

For example, did you know that increases to water rates and garbage fees will cost the average household with a medium-sized garbage bin and normal water use about $87 more annually after the 2015 budget is passed?

You probably didn’t know. It hasn’t been talked about. Some councillors at yesterday’s executive committee meeting seemed surprised to hear about the increases, probably because they had been so focused up to now on the property tax increase.

There’s got to be a better way to do this.

What if, instead of talking about percentages and rates, the city instead just put together a tally of all the tax increases, rate increases and fare increases that’ll affect the average Toronto household?

Add it all up and present the number - in dollars, not percentages. Make it easy to understand. Call it the Average Household Impact, or AHI.

And don’t selectively leave out other budget impacts. The average family in Toronto relies on transit to some degree. Fare increases place as much of a burden on those families as property tax increases. The same goes for increases to the cost of water and garbage collection.

So, for example, if we look at the 2015 proposed budget through that lens, and add up all these increased costs our hypothetical average household will face in 2015, the total impact is $273.

That includes:

• $93 more charged to the average residential property tax bill, which assumes a home valued at the city-wide average of $524,833. The numbers break down to $33 just to maintain existing city services, $26 for new and enhanced services, $13 for the Scarborough subway, $11 for the complicated CVA shift and $10 for education. The City of Toronto has no control over the latter two items, but you pay them regardless, so they shouldn’t be ignored.
• $33 more charged annually for the cost of collecting trash from their medium-sized garbage bin, a 58% increase over 2014. This increase is part of a long-term strategy to move toward a solid waste collection program that is funded entirely by user fees.
• A 6.5 per cent increase to residential water rates, causing the average annual water bill to increase by $54.
• About $93 more per year in transit costs, based on the monthly, non-discounted cost of a Metropass increasing from $133.75 to $141.50.

I’ve rounded all figures to the nearest dollar.

I don’t know about you, but those numbers mean a heck of a lot more to me than the percentages that are normally bandied about during budget time.

The AHI isn’t a perfect reform, of course. People who live in houses valued far above or far below the city average would still have trouble understanding changes in their property tax bill. It might make sense to provide AHI figures for each of the 44 wards based on assessment data, with separate breakdowns for people who live in multi-residential buildings.

And using the cost of a Metropass to measure the impact of TTC fare increases is imperfect - some families get by with tokens, and some with no transit usage at all, while others might buy two or three Metropasses a month.

And water and garbage bin usage are, of course, pretty dynamic variables. Some families are green enough to get by with just a small bin. Some might save water by swearing off showering.

And, of course, this might be too limited. It could make sense to also include impacts from user fee increases to recreation programs and childcare programs.

But still, something like an AHI would be better than what we have now, which basically amounts to long debates about something that the average person can’t relate to or understand. Putting some real dollar figures behind the city’s budget debate would go a long way toward making the process more accessible - and less frustrating.