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Senior Member
City faces deep cuts
Kenneth Kidd Feature Writer
Published On Sat Oct 24 2009
With a fiscal shortfall expected to reach as high as $500 million next year, city manager Joe Pennachetti has already circulated a memo asking departments to cut 5 per cent from their net operating budgets in each of the next two years.
The Toronto Star
Soaring welfare costs have put the City of Toronto in such "dire" financial straits that tax hikes and service reductions are virtually certain next year.
"It's not going to be pretty," Councillor Joe Mihevc, a member of the city's budget committee, said Saturday.
With a fiscal shortfall expected to reach as high as $500 million next year, city manager Joe Pennachetti has already circulated a memo asking departments to cut 5 per cent from their net operating budgets in each of the next two years.
But that would work out to savings of only $340 million overall, and just $170 million next year.
By law, municipalities cannot run deficits, so the remainder of the shortfall would have to be covered by increased property taxes and user fees and/or transfers from the federal and provincial governments.
"The situation is dire this year in a way that it has never been and the traditional funding partners are stretched," said Mihevc.
Queen's Park, for instance, has just unveiled a record deficit and is itself looking at 5 per cent spending cuts in all areas except health and education.
"We know it's going to be a tough ask," Mihevc said. "There's not much money to go around."
Welfare costs alone run into the hundreds of millions of dollars, and Mihevc said the number of welfare cases is expected to top 100,000 next year - at least 25% higher than in 2008.
Mihevc said the city manager's memo is aimed at getting all departments to identify where a 5 per cent cut would come.
"Will every department be able to absorb 5 per cent without having a serious impact on service? Absolutely not. But we need to know what 5 per cent means to every department."
The cuts are to a department's net operating budget - essentially the part of their overall budget that is paid for through property taxes rather than transfers from senior governments and money the department raises itself through fees.
Only 30 per cent of the TTC's budget, for instance, is covered by property taxes. But parks, forestry and recreation is financed almost entirely through taxes.
"Five per cent, when you know what that means to a library, you know it means the possibility of cutting a whole day of service per library branch," said Mihevc. "I don't think that's something Torontonians want."
But some reductions in city services are certain, since a 3 per cent across-the-board increase in property taxes would only raise $100 million.
Kenneth Kidd Feature Writer
Published On Sat Oct 24 2009
With a fiscal shortfall expected to reach as high as $500 million next year, city manager Joe Pennachetti has already circulated a memo asking departments to cut 5 per cent from their net operating budgets in each of the next two years.
The Toronto Star
Soaring welfare costs have put the City of Toronto in such "dire" financial straits that tax hikes and service reductions are virtually certain next year.
"It's not going to be pretty," Councillor Joe Mihevc, a member of the city's budget committee, said Saturday.
With a fiscal shortfall expected to reach as high as $500 million next year, city manager Joe Pennachetti has already circulated a memo asking departments to cut 5 per cent from their net operating budgets in each of the next two years.
But that would work out to savings of only $340 million overall, and just $170 million next year.
By law, municipalities cannot run deficits, so the remainder of the shortfall would have to be covered by increased property taxes and user fees and/or transfers from the federal and provincial governments.
"The situation is dire this year in a way that it has never been and the traditional funding partners are stretched," said Mihevc.
Queen's Park, for instance, has just unveiled a record deficit and is itself looking at 5 per cent spending cuts in all areas except health and education.
"We know it's going to be a tough ask," Mihevc said. "There's not much money to go around."
Welfare costs alone run into the hundreds of millions of dollars, and Mihevc said the number of welfare cases is expected to top 100,000 next year - at least 25% higher than in 2008.
Mihevc said the city manager's memo is aimed at getting all departments to identify where a 5 per cent cut would come.
"Will every department be able to absorb 5 per cent without having a serious impact on service? Absolutely not. But we need to know what 5 per cent means to every department."
The cuts are to a department's net operating budget - essentially the part of their overall budget that is paid for through property taxes rather than transfers from senior governments and money the department raises itself through fees.
Only 30 per cent of the TTC's budget, for instance, is covered by property taxes. But parks, forestry and recreation is financed almost entirely through taxes.
"Five per cent, when you know what that means to a library, you know it means the possibility of cutting a whole day of service per library branch," said Mihevc. "I don't think that's something Torontonians want."
But some reductions in city services are certain, since a 3 per cent across-the-board increase in property taxes would only raise $100 million.