allabootmatt
Senior Member
A first for Toronto: Miller to unveil balanced budget
Property tax hike could be 3.7 per cent, depending on decision over user fees
JENNIFER LEWINGTON
From Monday's Globe and Mail
January 28, 2008 at 5:19 AM EST
In a first for the city, Mayor David Miller is set today to bring forward a balanced budget with no gaping hole to fill for 2008.
Without the usual annual drama of a city trek to Queen's Park for money to balance the books, a different political fight is expected to unfold at City Hall on two fronts: the mayor's spending choices for 2008 and prospects, still uncertain, for the city to put itself on a sounder fiscal footing for the long term.
"We will present a viable budget and they [city councillors] will decide if it is balanced," said budget chief Shelley Carroll. "My proposal won't have a hole in it."
Like Mr. Miller, she declined to share precise details before this morning's kickoff. What is clear is the lack of suspense on the broad strokes: A residential property tax hike (expected to be 3.7 per cent but subject to change given an ongoing political debate on proposed new user fees for recreation) and a major, but still unspecified injection of cash for transit this year from the province's economic statement last month.
An end to the city's tiresome trek to Queen's Park, at least for this year, is "meaningful," said Councillor Karen Stintz (Ward 16, Eglinton-Lawrence), a frequent critic of the mayor. "But there is still a sense it [the budget] is being held together by strings as opposed to having a solid fiscal plan," she cautioned, noting that debt charges rank second highest (after police costs) on the list of taxpayer-funded services.
Toronto Board of Trade president Carol Wilding is also relieved the city will not have to pull out its begging bowl to wrap up a budget that goes to council in late March.
"After we have come through a year where we feel we have been in budget mode the whole time and in financial crisis, to come forward with a balanced budget is a great message," she said, citing the bitter fight for new tax revenues won by Mr. Miller last fall.
Revenue from the new land transfer tax and vehicle registration fee, expected to raise $175-million this year, will help balance this year's budget. But Mr. Miller has promised the funds, in future, will pay for visible service improvements.
Ms. Wilding credits the mayor for taking political heat to raise the new taxes, permitted under new city powers granted by the province last year.
"Well done to the city, and it is good for all of us," she said of the mayor's breakthrough on the budget. "But don't sit back."
In her view, the city also needs to control labour costs, with seven of nine collective agreements set to expire in the coming year, and work with the private sector to pay for transit and other badly needed infrastructure improvements over the next five years.
To that end, she and others are looking to recommendations next month from the mayor's blue-ribbon fiscal review panel, named last fall by Mr. Miller in response to criticisms that the city's fiscal house is not in order.
Ms. Carroll, also keen to hear from the panel, cautions its advice may not have a direct financial impact this year.
Despite widely shared relief over this year's budget numbers, Ms. Carroll is the first to acknowledge that the city is not out of the woods.
"We are still in fiscal restraint," she said, urging fellow councillors to judge today's budget on the basis of "did we get it right?" and refrain from a "blue-sky shopping list" of new spending.
Much of the city's ability to present a virtually balanced budget lies with Ontario Finance Minister Dwight Duncan's mid-December economic statement that pledged $500-million for the "immediate demands" of transit operations across the province. Toronto's share is expected to be in excess of $100-million this year.
At the time, neither the province nor the city revealed the exact dollar impact on the city. Since then, provincial and city officials have negotiated quietly so that Toronto has flexibility in how the funds are earmarked between day-to-day operations and capital.
The quiet discussions, held well before today's budget launch, demonstrates a new "adult working relationship" between Toronto and Queen's Park.
"That is huge to me and I hope it is huge to the board of trade and others," Ms. Carroll said.
Still, fiscal uncertainties remain for Toronto.
For example, the city wants the province to upload a range of social services, a staggering $729-million in 2007 borne by local property taxpayers, in negotiations expected to conclude this spring. Last year, the province announced an important down payment with a pledge (worth $217-million to Toronto in 2011) to cover the full cost of the Ontario Disability Support Program and the Ontario Drug Benefit.
Despite provincial cash for transit this year, Queen's Park has not acceded to the city's demand for a return to a mid-1990s funding formula that paid half of the city's transit operating costs and 75 per cent of capital needs.
Even if Toronto has not turned the fiscal corner, Mr. Miller is upbeat about the city's prospects.
"I said all along that if the city did its part with difficult decisions on taxes and cost-containment ... the province would do its part," he commented last week, "and we would have a budget that preserves services."
Some of the highlights
Details of the city's 2008 proposed operating budget, a modest expansion on the $7.8-billion budget last year, are under wraps until today. But some of the headlines have been telegraphed in recent weeks by Mayor David Miller and others. For example:
A likely property tax increase in the range of 3.7 per cent for homeowners. In 2007, council approved a property tax increase of 3.8 per cent for homeowners and 1.26 per cent for non-residential properties.
A mid-December economic statement from Ontario Finance Minister Dwight Duncan signalled a significant, but unspecified, infusion of cash to the city for transit, likely to be in the range of $100-million to $140-million, that essentially assures the city of sufficient funds to balance its budget this year.
A continuation of savings and efficiencies in the range of $70-million to $80-million, following cost-containment measures in 2007 to stockpile a larger than usual year-end surplus. No loss of front-line services is expected, with only modest new spending in selected priority areas, such as parks and economic development.
A move to replenish budget reserves, drained in past years to balance the books. So-called discretionary reserves, those not already earmarked for specific programs, have been raided in recent years to help balance the books.
--------------------------
Well it's not perfect, but I'm glad to see that the implementation of new taxes has, at least for now, taken us out of crisis mode. Keeping wage increases under control will be crucial for next year.
Property tax hike could be 3.7 per cent, depending on decision over user fees
JENNIFER LEWINGTON
From Monday's Globe and Mail
January 28, 2008 at 5:19 AM EST
In a first for the city, Mayor David Miller is set today to bring forward a balanced budget with no gaping hole to fill for 2008.
Without the usual annual drama of a city trek to Queen's Park for money to balance the books, a different political fight is expected to unfold at City Hall on two fronts: the mayor's spending choices for 2008 and prospects, still uncertain, for the city to put itself on a sounder fiscal footing for the long term.
"We will present a viable budget and they [city councillors] will decide if it is balanced," said budget chief Shelley Carroll. "My proposal won't have a hole in it."
Like Mr. Miller, she declined to share precise details before this morning's kickoff. What is clear is the lack of suspense on the broad strokes: A residential property tax hike (expected to be 3.7 per cent but subject to change given an ongoing political debate on proposed new user fees for recreation) and a major, but still unspecified injection of cash for transit this year from the province's economic statement last month.
An end to the city's tiresome trek to Queen's Park, at least for this year, is "meaningful," said Councillor Karen Stintz (Ward 16, Eglinton-Lawrence), a frequent critic of the mayor. "But there is still a sense it [the budget] is being held together by strings as opposed to having a solid fiscal plan," she cautioned, noting that debt charges rank second highest (after police costs) on the list of taxpayer-funded services.
Toronto Board of Trade president Carol Wilding is also relieved the city will not have to pull out its begging bowl to wrap up a budget that goes to council in late March.
"After we have come through a year where we feel we have been in budget mode the whole time and in financial crisis, to come forward with a balanced budget is a great message," she said, citing the bitter fight for new tax revenues won by Mr. Miller last fall.
Revenue from the new land transfer tax and vehicle registration fee, expected to raise $175-million this year, will help balance this year's budget. But Mr. Miller has promised the funds, in future, will pay for visible service improvements.
Ms. Wilding credits the mayor for taking political heat to raise the new taxes, permitted under new city powers granted by the province last year.
"Well done to the city, and it is good for all of us," she said of the mayor's breakthrough on the budget. "But don't sit back."
In her view, the city also needs to control labour costs, with seven of nine collective agreements set to expire in the coming year, and work with the private sector to pay for transit and other badly needed infrastructure improvements over the next five years.
To that end, she and others are looking to recommendations next month from the mayor's blue-ribbon fiscal review panel, named last fall by Mr. Miller in response to criticisms that the city's fiscal house is not in order.
Ms. Carroll, also keen to hear from the panel, cautions its advice may not have a direct financial impact this year.
Despite widely shared relief over this year's budget numbers, Ms. Carroll is the first to acknowledge that the city is not out of the woods.
"We are still in fiscal restraint," she said, urging fellow councillors to judge today's budget on the basis of "did we get it right?" and refrain from a "blue-sky shopping list" of new spending.
Much of the city's ability to present a virtually balanced budget lies with Ontario Finance Minister Dwight Duncan's mid-December economic statement that pledged $500-million for the "immediate demands" of transit operations across the province. Toronto's share is expected to be in excess of $100-million this year.
At the time, neither the province nor the city revealed the exact dollar impact on the city. Since then, provincial and city officials have negotiated quietly so that Toronto has flexibility in how the funds are earmarked between day-to-day operations and capital.
The quiet discussions, held well before today's budget launch, demonstrates a new "adult working relationship" between Toronto and Queen's Park.
"That is huge to me and I hope it is huge to the board of trade and others," Ms. Carroll said.
Still, fiscal uncertainties remain for Toronto.
For example, the city wants the province to upload a range of social services, a staggering $729-million in 2007 borne by local property taxpayers, in negotiations expected to conclude this spring. Last year, the province announced an important down payment with a pledge (worth $217-million to Toronto in 2011) to cover the full cost of the Ontario Disability Support Program and the Ontario Drug Benefit.
Despite provincial cash for transit this year, Queen's Park has not acceded to the city's demand for a return to a mid-1990s funding formula that paid half of the city's transit operating costs and 75 per cent of capital needs.
Even if Toronto has not turned the fiscal corner, Mr. Miller is upbeat about the city's prospects.
"I said all along that if the city did its part with difficult decisions on taxes and cost-containment ... the province would do its part," he commented last week, "and we would have a budget that preserves services."
Some of the highlights
Details of the city's 2008 proposed operating budget, a modest expansion on the $7.8-billion budget last year, are under wraps until today. But some of the headlines have been telegraphed in recent weeks by Mayor David Miller and others. For example:
A likely property tax increase in the range of 3.7 per cent for homeowners. In 2007, council approved a property tax increase of 3.8 per cent for homeowners and 1.26 per cent for non-residential properties.
A mid-December economic statement from Ontario Finance Minister Dwight Duncan signalled a significant, but unspecified, infusion of cash to the city for transit, likely to be in the range of $100-million to $140-million, that essentially assures the city of sufficient funds to balance its budget this year.
A continuation of savings and efficiencies in the range of $70-million to $80-million, following cost-containment measures in 2007 to stockpile a larger than usual year-end surplus. No loss of front-line services is expected, with only modest new spending in selected priority areas, such as parks and economic development.
A move to replenish budget reserves, drained in past years to balance the books. So-called discretionary reserves, those not already earmarked for specific programs, have been raided in recent years to help balance the books.
--------------------------
Well it's not perfect, but I'm glad to see that the implementation of new taxes has, at least for now, taken us out of crisis mode. Keeping wage increases under control will be crucial for next year.
. 
