[rbt]

Mississauga has no debt, it has several hundred million dollars saved up. Yet despite this, it raising taxes each year (just like Toronto and the rest of the GTA) and has already predicted that it will have to start borrowing money in less than ten years because there is not funding.

So what you propose is not realistic.

Taxes are simply too low. It's arguable which level of government should raise them.

Personally, I think the feds should be giving loans to municipalities against future federal revenue resulting from the upgrade.

Feds budget $5B per year for infrastructure loans. Municipalities apply for the loan. The higher ROI applications get funded in full based with some consideration for track record.

Repayment is from increases in FEDERAL tax revenue collected as a result of the improvement taking into account general revenue improvement as a baseline, with this increase being over and above that.


The federal government can show that smart investing in area X has benefited all Canadians by reducing taxes or increasing health care, etc.

 

[W. K. Lis]

Mississauga mulls service cuts

Mississauga has no debt, it has several hundred million dollars saved up. Yet despite this, it raising taxes each year (just like Toronto and the rest of the GTA) and has already predicted that it will have to start borrowing money in less than ten years because there is not funding.

So what you propose is not realistic.

Link to this article in the Saturday Star about Mississauga's service cuts:

With declining growth and assessment base, famously debt-free city looking to trim its budget
Sep 13, 2008 04:30 AM

Phinjo Gombu
Urban Affairs Reporter

Mississauga faces some difficult choices with the release of a staff report late yesterday that recommends cutting $12 million from the $515 million operating budget over the next two years.

The GTA's second-largest city, once cash-rich but now struggling with a declining assessment base, faces the prospect of cuts in service that might mean fewer fire trucks on the road, library closings, or a fee charged to residents for emergency responses to car accidents.

At a meeting next Wednesday, the city's budget committee also plans to look at fees for parking at city parks, reduced snow clearing, fewer sidewalk and road repairs, a 25-cent transit fare increase and eliminating some poorly performing transit routes.

"There will be staff implications because you cannot provide services without people," said the city's budget director, Roberto Rossini. He was asked by council to come up with some $15.3 million in savings in June. Almost half that cost was attributed to increases in the cost of fuel, utilities and winter maintenance – items that will also hit many other municipal budgets across the GTA in coming months.

The stark choice facing council was to find the savings or hit residents with a 9.7 per cent property tax hike next year, followed by a potential 9.9 per cent hike the following year – more than double last year's 3.9 per cent tax hike.

Rossini was able to shave about $3.2 million, but for the rest came up with at least 80 recommendations for council to ponder.

"No decisions on any budget reduction options have been made," he said yesterday. "Council will be seeing these for the first time ... so many of these ideas could be complete non-starters for them."

Councillor George Carlson said it's time for Mississauga council to make some hard decisions, even if that means staff cuts.

"Seventy-five per cent of our budget is staffing, so it stands to reason that if there are savings, that's where it's going to come from," Carlson said.

"Sooner or later, the free money from developers (development charges paid to the city) will be finished and the party's over," he continued.

"We have to really tighten down. There's no way we can continue with the past practice of budgets growing every year beyond the inflation rate."

The current financial woes are especially galling in Mississauga because the city hasn't borrowed any money since 1978.

Mississauga's woes have escalated recently after years of unprecedented growth.

Fuelled by a growing assessment base, the city managed without a single tax hike between 1990 and 2001.

But now, mostly built-out, it has turned to its cash reserves to help make ends meet. At the current rate of depletion those reserves would disappear by 2012, putting the city in the red for the first time.

Longtime Mayor Hazel McCallion has become a leading champion for federal government assistance to cities dealing with an infrastructure crisis that, in Mississauga's case, will require about $75 million a year for the next 20 years.

Mississauga council flirted with a proposal last year for a 5 per cent stopgap infrastructure levy that would have raised an extra $12.5 million a year. But in the end councillors opted for a 1 per cent levy that will bring in only $2.5 million a year.

 

[kEiThZ]

Taxes are simply too low. It's arguable which level of government should raise them.

This is debatable...which jurisdictions are you talking about? We have quite a large variance on property taxes within the GTA. And between income, sales and corporate tax rates between provinces. And taxes in part also affect the attraction of investment and new residents. Raising taxes could impact future development. It's not quite as simple as you make it out to be.

Personally, I think the feds should be giving loans to municipalities against future federal revenue resulting from the upgrade.

Feds budget $5B per year for infrastructure loans. Municipalities apply for the loan. The higher ROI applications get funded in full based with some consideration for track record.

Repayment is from increases in FEDERAL tax revenue collected as a result of the improvement taking into account general revenue improvement as a baseline, with this increase being over and above that.


The federal government can show that smart investing in area X has benefited all Canadians by reducing taxes or increasing health care, etc.

The federal government though, does not give loans. It gives grants, and once you get them involved you have to dance to their tune. That's how we get rail lines to Peterborough instead of TTC funding. No Conservative politician will waste infrastructure funding on Torono's Liberal wasteland and no Liberal will waste money on votes he would win regardless.

If your suggestion is that the federal government should directly loan money to municipalities, that would get into a whole bunch of new issues. First, that would violate at minimum the spirit and probably the law of the constitution where municipalities are provincial responsibilities. Second, the Feds would now be absorbing the financial risks of every major city in Canada as they fund their infrastructure. This is stupid....it's not too far fetched from having the US federal government bail out homeowners who buy too much house.

The real solution for Ontario is simple. Upload the social services costs and let the municipalities use the new revenue room to build infrastructure, balance their books and lower their taxes. Why the hell are municipalities funding welfare, social housing, public health, etc.?

 

[rbt]

This is debatable...which jurisdictions are you talking about? We have quite a large variance on property taxes within the GTA. And between income, sales and corporate tax rates between provinces. And taxes in part also affect the attraction of investment and new residents. Raising taxes could impact future development. It's not quite as simple as you make it out to be.

Jurisdiction doesn't matter -- the problem isn't tied to any single location. It is country wide and going to become much worst as the 60's/70's stuff starts breaking en-mass.

Taxes, user fees, borrowing, etc. are not enough to support our current lifestyle AND maintain or current infrastructure.

Either we built too much and need to abandon parts of the country OR we need to raise revenue to support it OR we cut back in other areas of spending.

We built a great house and now that the roof needs to be repaired and the deck supporting is rotting, we find no money in our collective bank accounts to do the necessary work.

I would prefer not to borrow for maintenance work but it seems no level of government has the backbone necessary to tackle the problem head-on.

 

[kEiThZ]

We built a great house and now that the roof needs to be repaired and the deck supporting is rotting, we find no money in our collective bank accounts to do the necessary work.

I would prefer not to borrow for maintenance work but it seems no level of government has the backbone necessary to tackle the problem head-on.

Why not borrow? You borrow a mortgage to build a house, right? What makes building a transit line or water main any different. If those services were delivered by independent entities they would do just that. They would issue corporate bonds, fix the problem or expand infrastructure and use new revenue to pay of the debt. This does not mean they have to be private either. They can simply be city corporations....Toronto Hydro is a good example.

 

[cacruden]

^ He said he does not support borrowing for "maintenance" - building (new) is different. Maintenance should be funded out of revenues, it is just part of operations.

 

[Edward Skira]

Fuelled by a growing assessment base, the city managed without a single tax hike between 1990 and 2001.

This galls me the most. No taxes for us. Let's leave it to our kids to have to pay for it. Even raising taxes at the rate of inflation would have been sufficient.

 

[cacruden]

^ I read that to be that they charge enough on new lots etc. that they are making a profit - and thus are funding it that way. Now that was a guess - but in that case - it is not leaving it to the next generation.

I grew up in a Township that was run by an idiot - who was not charging pretty well anything for new home contruction - and running up the accumulated debt (it reached 42% of revenues - before new management got it under control).

 

[kEiThZ]

^ He said he does not support borrowing for "maintenance" - building (new) is different. Maintenance should be funded out of revenues, it is just part of operations.

Yeah but what he is referring to isnt so much maintenance as it is major recapitalization, which is almost akin to building new.

I would have no problem with allowing Metrolinx to issue 90 billion dollars worth of bonds to fund their plans and then being allowed to levy a regional property tax and collect road tolls to fund its program.

 

[doady]

Taxes are simply too low. It's arguable which level of government should raise them.

The higher levels of government have actually been cutting taxes, while municipalities have been force to raise their own. It is ridiculous. And municipalities don't even have the power to raise new taxes, like their own gas tax or their own sales taxes to offset Harper's stupid and pointless cuts. After all, what is the point of less gas ans sales taxes when we have to pay mroe property tax anyways?

 

[kEiThZ]

The higher levels of government have actually been cutting taxes, while municipalities have been force to raise their own. It is ridiculous. And municipalities don't even have the power to raise new taxes, like their own gas tax or their own sales taxes to offset Harper's stupid and pointless cuts. After all, what is the point of less gas ans sales taxes when we have to pay more property tax anyways?

There is nothing stopping any municipality from raising property taxes to capture some of the reduced taxes collected from a GST cut, in their jurisdiction. It would be a rough approximate of course. There is also nothing stopping the province from raising the PST to take up the tax room left by the GST cut. Whether the province or the municipality have the political will is an altogether different story. If you are upset that the feds cut the GST, why aren't you upset that the provinces didn't raise the PST or that municipalities aren't raising property taxes fast enough?

 

[doady]

There is nothing stopping any municipality from raising property taxes to capture some of the reduced taxes collected from a GST cut, in their jurisdiction. It would be a rough approximate of course. There is also nothing stopping the province from raising the PST to take up the tax room left by the GST cut. Whether the province or the municipality have the political will is an altogether different story. If you are upset that the feds cut the GST, why aren't you upset that the provinces didn't raise the PST or that municipalities aren't raising property taxes fast enough?

Why am I upset that the federal government are not only ignoring the fiscal imbalance issue, but also making it worse? Why am I upset that federal tax cuts and downloading is forcing the province and the municipalities to raise taxes? Is this a real question?

 

[kEiThZ]

Why am I upset that the federal government are not only ignoring the fiscal imbalance issue, but also making it worse? Why am I upset that federal tax cuts and downloading is forcing the province and the municipalities to raise taxes? Is this a real question?

If the provinces and municipalities feel they don't have the revenue to meet their obligations, they should raise taxes. It is rather convenient that they don't do that and then blame the federal government for not raising revenue for them. That would be akin to you blaming your parents for not making enough money to feed your wife and kids.

While I agree that some downloading has to be reversed (ie the province should not burden municipalities with social spending), it's ridiculous to blame your poor municipal services on the federal government. Why should the rest of Canada pay for improved bus services in Toronto?

If you want better services then ask your local council to raise taxes to pay for them.

Mississauga has no debt, it has several hundred million dollars saved up. Yet despite this, it raising taxes each year (just like Toronto and the rest of the GTA) and has already predicted that it will have to start borrowing money in less than ten years because there is not funding.

As you have pointed out here, this is exactly what sauga has been doing. They kept their taxes low to attract residents and businesses, particularly from the 416. Now they are paying the price for this policy. They are solely responsible for their predicament. No tax raises in 11 years??? And then they blame the feds for their lack of revenue. Gimme a break. I have a lot of respect for Hazel, but this tactic is just a low blow.

 

[Rainforest]

Why am I upset that the federal government are not only ignoring the fiscal imbalance issue, but also making it worse? Why am I upset that federal tax cuts and downloading is forcing the province and the municipalities to raise taxes? Is this a real question?

In a sense, the federal government is addressing the fiscal imbalance by reducing the federal tax share, and thus giving provinces and municipalities room to raise their taxes.

 

[rbt]

In a sense, the federal government is addressing the fiscal imbalance by reducing the federal tax share, and thus giving provinces and municipalities room to raise their taxes.

If they were stepping aside, they would not have announced a GST reduction, but a transfer from GST to the province -- with individual announcements by the province as to what they will do with the new tax (drop it or roll it into their standard PST).


Instead, the conservative feds followed up with media in several different provinces indicating that the provincial taxation was too high and that the province needs to make reductions for economic growth. Ontario was not the only province to receive these.