[3cp1]

Let's get this straight. $50,000 dollars in 1950 is the equivalent of something like $450,000 today. Add to that all of the maintenance costs of keeping a house in good shape for more than 50 years (probably at least $250,000 in today's dollars), and the property taxes and you can see that granny hasn't gotten rich off of her house. She has merely kept up with inflation. Stocks, which rise on average 7% per year are actually a far better investment than real estate in most cases.

Now some areas may have increased at a rate slightly higher than inflation. Possibly Cabbagetown, Riverdale, the Beaches, and a few others. But I can think of plenty of areas in the city where the opposite may be true. There are still lots of areas downtown or very close to downtown where the average house price is $300,000. Lots of these areas have not been gentrified, some have even declined, and as a result, the housing prices have not appreciated much.

The real issue is that Miller promised many times to limit tax increases to the rate of inflation. The problem is that city unions have been able to negotiate wage increases far exceeding inflation. And now guess what? Tax increases are exceeding inflation by a wide margin. Property taxes have been rising at roughly twice the rate of inflation. And now that's not enough, Miller wants to introduce a land transfer tax, a gas tax, a car tax, a booze tax, and a sidewalk tax. Coincidence? I think not.

The city is right to demand an end to the Harris policy of downloading provincial services onto municipalities. But the Toronto Board of Trade is right to ask Miller to look at controlling costs, something he refuses to do. Instead, he accuses them of being irresponsible. Expecting Miller to stop catering to the unions is like expecting fish to stop swimming. And until the city gets city wages back in line with market rates, and starts contracting out, as well as opening up infrastructure projects to free market competition, the province can use it as an excuse not to upload.

Unfortunately, the province is also hesitant to upload because it doesn't have much money, and that has to do with the equalization system. Ontario is becoming a have not province, as its manufacturing sector dies, while sending billions to provinces like Quebec, which is now becoming a have province. But the Liberals haven't been effective at all in their half hearted campaign to remedy the situation.

I say get rid of Miller ASAP, freeze city wages until they are back in line with market wages, contract out city services, and open up infrastructure projects like the Bombardier subway contract to competitioin. Also, we need to elect a premier who is going to to be more effective at arguing Ontario's case, so that the province can actually afford to upload municipal services without raising taxes through the roof.

It's not that Torontonians aren't willing to pay tax. It's just that the taxes (when you factor in federal and provincial) are already so high and Torontonians receive so little in return. That's why there is so much public pressure on Miller to finally control spending and stop catering to the unions.

Here are just a few facts to mull over:
-On average, Toronto pays its workers around a third more than the province and a quarter more than the feds
-labour is the most expensive item in the city budget by far
-the City’s net budget is increasing by 9.3% this year, more than triple the current rate of inflation
-Over 2000 city workers make $100,000.000 or more
-A city-employed cashier makes $25.90 an hour, more than twice the wages of a cashier in the private sector
-litter-pickers - those guys with sticks who pick up garbage in the park - make $46,000 a year plus benefits
-Streetcar drivers (who don't even have to steer) earn $80,000 per year
-the City Manager's salary is as much as the Prime Minister's
-Toronto has hired 8,000 more civil servants in the past 4 years and now has over 60,000 bureaucrats to manage 2.5 million people. The city of Pittsburgh has ¼ of this amount on a per capita basis and is a much cleaner city
-TTC workers won the right not to have to pay the provincial health tax (retroactive to 2004) and now Toronto residents have to shoulder the added tax burden ($18 million and counting)
-under the city of Toronto's Fair Wage policy, any outside private firm bidding on a city contract must agree to pay its employees at 90% of the unions pay scale
-More than 40% of Toronto workers are in union shops. The average public sector union rate in the US is 12 %.
-Montreal (a city whose finances are in much better shape than Toronto) is looking at freezing city wages in 2007
-the city's debt and the costs of servicing it have been increasing dramatically under David Miller's rule
-In Toronto the private sector loses 9,000 jobs on average per year

I should add to this analysis:
Chances are, Granny paid a lot in interest to pay down the mortgage, so her real estate investment may not have even kept pace with inflation. Plus this little doozy:

The average city staff salary is more than $60,000 — plus annual benefits of $14,900, compared to the average city wide of just over $40,000! So city employees are making on average almost twice as much as an average Torontonian!

 

[theman23]

Some of those numbers seem hard to believe. A city cashier at 25.90 an hour will be making more than a TTC operator with 3 years experience. An $80 000 average salary for TTC streetcar operators would mean the average operator peforms extensive overtime. 60 000 bureaucrats making your stated salary and benefits would eat up 4.5 billion dollars of the budget.

 

[Hydrogen]

She can tap into that money without selling with a reverse mortgage or refinancing. It is an asset now and going into a bank with a $700k home even with no plans to move gives you different fiscal abilities than walking into a bank with a $300k home or no assets at all. Yes, everyone else that moves also needs to deal with the same market conditions. Not sure what the point is because they should be paying the same rate of tax too.

Granny grows weary with you instructing her on what she ought to do with her house. You might want her to do that, but there is nothing that says she must.

Why don't they rent? Property tax is applied everywhere. It is the dumb land transfer tax idea that would be unbalanced because nowhere else has it. Someone who has $300k to spend on a home now would be wise to buy in the 416... the tax rates are lower here right now.

They may not want to rent because they may not want to give a landlord all their hard earned money. The taxes here are lower, but the property prices are higher.

Well that should be fixed so that when we raise the property tax people get dinged the right amount.

Concerning property valuations, I agree, but the property tax system should also be examined.

House, car, it is the same thing. Two people own BMW 7 Series, only one can afford it... they are still living the same life style. The sum of cash + assets - debts tells you the fiscal truth at any given time, but you can't see that outwardly. Income includes asset growth, debt reduction, and cash growth. Expenses include asset depreciation or loss, debt increase, and cash reduction. If I live a life that includes a $700k home and a $90k car I'm living a lifestyle.... affordability is a totally different thing.

A house and a car are not the same thing. If you buy a house you owe on a mortagage. If you lease or buy a car you pay a monthly payment plan. Cars depreciate very quickly, so no one makes money off of them. Either way, small payments every month for many years is the only method that would allow people to do such things. But this is beside the point.

If a person or a family bought a $50,000 house, that is what they bought. If they bought a $50,000 house and it is now worth $700,000, they still bought a $50,000 house. The value of the house is not realized until they sell it - and so long as they don't buy in the same market. People who buy a $700,000 house today will end up owning a house potentially worth millions in twenty years. They still bought a $700,000 house.

I'm talking about two different taxes.

Nothing wrong with municipal taxes - in theory. But the method in how they are calculated is a mess. Presently, residential property tax is increasing in Toronto due to the shifting of proportions between business and residential. The city would like to see an increase in this tax rate as well, and it will come (as will hikes in service costs). But the city should not be forced to use the money derived from this tax to pay for downloaded programs from the province.

The second tax, the land transfer tax, was a means to make up for the revenues now being used to cover those provincial responsibilities, and to cover the years of neglect by both the provincial and federal governments. In essence, we would have a tax on us to cover up the fiscal mess left by those two other governments.

Collecting taxes is not a RIGHT as afransen stated, it is a RESPONSIBILITY of the government that collects them. That means these monies must be collected and used responsibly, and not as a means to taxing perceptions of lifestyle, covering over the bad practices of other governments or as an endless source of cash for mismanaged city programs or contracting methods.

 

[afransen]

"If a person or a family bought a $50,000 house, that is what they bought. If they bought a $50,000 house and it is now worth $700,000, they still bought a $50,000 house. The value of the house is not realized until they sell it - and so long as they don't buy in the same market. People who buy a $700,000 house today will end up owning a house potentially worth millions in twenty years. They still bought a $700,000 house."

No, I disagree. $1 in 1950 is a completely different unit to $1 in 2007. You could perhaps talk about granny owning a $50,000 (1950 dollars) house, but to say the house cost $50,000 implying today's currency is inaccurate.

Frankly, what granny paid for the house is completely irrelevant to anyone, including granny. What matters is that she owns it. Furthermore, what matters is its value--that is the amount that the market would bear for the sale of the house. I don't understand how you're quibbling with this point. Yes, perhaps the assessment system performs poorly, but that is a separate issue entirely.

To put things another way, are you suggesting property be taxed based on its most recent sale price in inflation unadjusted dollars?

"Collecting taxes is not a RIGHT as afransen stated"

No, I'm pretty sure it is. Feel free to consult the relevant legislation.

 

[Hydrogen]

No, I disagree.

Disagree all you want. There is nothing innacurate about what I said. Granny bought a $50,000 house. If that was the price she bought if for, that was the price she bought it for. There is nothing difficult to understand about it and one has to wonder about why you are having such difficulty with it. Nobody was talking about the actual unit value of 1950's dollar as compared to a dollar unit value today because the value of the house would have been adjusted according to criteria that go beyond just the unit value of the dollar.

To put things another way, are you suggesting property be taxed based on its most recent sale price in inflation unadjusted dollars?

I have not suggested any such thing. You will note that by the absence of such a statement.

In a democracy the people have granted the government the responsibility of collecting taxes and using them in manner as allowed by law. Legitimate state authority must be derived from the consent of the governed.

 

[Urban Shocker]

Granny and Gramps would have been far more likely to have paid $5,000 for their house in 1950, not $50,000.

If she'd been able to afford a $50,000 house in 1950 she'd probably be a botoxed old cougar without a care in the world today.

 

[AndreaPalladio]

And she'd be pushing 80 years old, so, insert Side Show Bob noise here.

 

[JasonParis]

Christopher Hume's take...

Don't blame Miller. It's not his fault
Jul 23, 2007 04:30 AM
Christopher Hume

That sucking sound you hear is Toronto getting caught in the downward spiral of a city drowning in complacency, ennui and ineptitude.

Though it's easy to blame Mayor David Miller for the situation we find ourselves in – having to shut down a good part of the TTC and God knows what else – that is simplistic nonsense.

Forget the media; it is not his fault. Yes, he could be a better communicator, more honest, dynamic, certainly less ideological and timid, but to hear the Denzil Minnan-Wongs of city council prattling on about the mayor's fear-mongering tactics is enough to make you scream. It is precisely this kind of irresponsible and self-serving twaddle that has brought politics into general contempt.

Toronto's economic crisis has been years, if not decades, in the making. It is built into the very structure of Canadian governance, something that hasn't been altered, let alone updated, in well over a century.

We have all heard endless whining about the financial straitjacket the province has imposed on the city, but it is the ugly truth that won't go away no matter how much we wish it would.

It's true that Queen's Park has granted increased taxing powers to Toronto, but as council made clear last week, it isn't prepared to use them. Such are the fools we elect to represent us.

But even if they had responded intelligently, and voted to increase car registration fees and land transfer taxes, it wouldn't have been enough.

The changes required are deep and systemic. They must be part of a wholesale redrawing of the Canadian model, something that's not going to happen.

This is a country profoundly out of touch with its own reality. The world needs more Canada, said U2's ever-fatuous front man Bono. That would come as news to most Canadians, certainly most Torontonians.

What else can one say about a country whose biggest and richest city can't afford to operate its public transit system? And it's not as if the TTC has much to offer even at the best of times; overcrowded, overpriced and overextended, it functions at the level of a third-rung city in Europe or Asia. Even Mexico City's is better.

There was a time, not so long ago, when the province covered 50 per cent of the TTC's operating costs and 75 per cent of its capital costs. Not only are those days over, but now the city must pay the province's social-service bills.

Then there's the Sheppard line itself, as misconceived a piece of public transit infrastructure as exists in the country. It is literally and figuratively a dead end.

What's so disturbing is that we all know this. We know the city's in decline and that the provincial and federal governments are content to go on taxing it to death. We know we are governed by mediocrities of dubious motivation. We know that change is desperately needed.

But we also know nothing will happen. As a society we have lost the capacity to respond to the need for change and innovation. We have crafted a system that leads inevitably to stalemate, stasis and status quo. No one should lose, but neither can they be allowed to win.

We prefer instead to tinker, apply Band-Aids and lurch along, dealing with each crisis as if it were happening for the first time.

We have been here before. We will be again.

 

[3cp1]

Christopher Hume's take...

Don't blame Miller. It's not his fault
Jul 23, 2007 04:30 AM
Christopher Hume

That sucking sound you hear is Toronto getting caught in the downward spiral of a city drowning in complacency, ennui and ineptitude.

Though it's easy to blame Mayor David Miller for the situation we find ourselves in – having to shut down a good part of the TTC and God knows what else – that is simplistic nonsense.

Forget the media; it is not his fault. Yes, he could be a better communicator, more honest, dynamic, certainly less ideological and timid, but to hear the Denzil Minnan-Wongs of city council prattling on about the mayor's fear-mongering tactics is enough to make you scream. It is precisely this kind of irresponsible and self-serving twaddle that has brought politics into general contempt.

Toronto's economic crisis has been years, if not decades, in the making. It is built into the very structure of Canadian governance, something that hasn't been altered, let alone updated, in well over a century.

We have all heard endless whining about the financial straitjacket the province has imposed on the city, but it is the ugly truth that won't go away no matter how much we wish it would.

It's true that Queen's Park has granted increased taxing powers to Toronto, but as council made clear last week, it isn't prepared to use them. Such are the fools we elect to represent us.

But even if they had responded intelligently, and voted to increase car registration fees and land transfer taxes, it wouldn't have been enough.

The changes required are deep and systemic. They must be part of a wholesale redrawing of the Canadian model, something that's not going to happen.

This is a country profoundly out of touch with its own reality. The world needs more Canada, said U2's ever-fatuous front man Bono. That would come as news to most Canadians, certainly most Torontonians.

What else can one say about a country whose biggest and richest city can't afford to operate its public transit system? And it's not as if the TTC has much to offer even at the best of times; overcrowded, overpriced and overextended, it functions at the level of a third-rung city in Europe or Asia. Even Mexico City's is better.

There was a time, not so long ago, when the province covered 50 per cent of the TTC's operating costs and 75 per cent of its capital costs. Not only are those days over, but now the city must pay the province's social-service bills.

Then there's the Sheppard line itself, as misconceived a piece of public transit infrastructure as exists in the country. It is literally and figuratively a dead end.

What's so disturbing is that we all know this. We know the city's in decline and that the provincial and federal governments are content to go on taxing it to death. We know we are governed by mediocrities of dubious motivation. We know that change is desperately needed.

But we also know nothing will happen. As a society we have lost the capacity to respond to the need for change and innovation. We have crafted a system that leads inevitably to stalemate, stasis and status quo. No one should lose, but neither can they be allowed to win.

We prefer instead to tinker, apply Band-Aids and lurch along, dealing with each crisis as if it were happening for the first time.

We have been here before. We will be again.

The Star loves to support Miller's tax and spend ways while totally ignoring how overpaid city workers are and how bloated the bureaucracy is. I just read an article where Miller said he hoped Toronto would get the same taxing powers as New York City. That would mean not only a land transfer tax, but get ready for this, an income tax and a sales tax. He doesn't seem to realize that Toronto is not New York, which has a far more prosperous economy, and a far greater pool of wealthy citizens, and that we have higher federal and provincial income taxes than New Yorkers do.

If Miller gets his way with the land transfer, you can be sure it will only whet his appetite for more of your money to increase city workers' wages even more and pay for useless projects like recreation centres and make work projects to fight gun crime. Gee, that's really working! 4 shot to death in one night over the weekend.

So are you ready for a municipal income tax and sales tax? Because that's what Miller will push for next. I guarantee it. Miller needs to be stopped now, and the citizens need to let him know they will not allow any more tax increases without a decade long wage freeze for all city workers. Then maybe the increased revenue for the city would actually be put to work to improve the city instead of lining the pockets of city workers at taxpayers' expense.

 

[JasonParis]

First off, there's no reason to quote an entire article, especially when it was in the previous post.

The Star loves to support Miller's tax and spend ways while totally ignoring how overpaid city workers are and how bloated the bureaucracy is.

Where's the proof?

Miller said he hoped Toronto would get the same taxing powers as New York City.

The City of Toronto Act's provision to allow Toronto some taxing powers was indeed asked for by the city, but as a means of dealing with the refusal of the province to upload their historically administered services. In order for the economic engine of the country to "cope," it asked for these taxes.

That would mean not only a land transfer tax, but get ready for this, an income tax and a sales tax. He doesn't seem to realize that Toronto is not New York, which has a far more prosperous economy, and a far greater pool of wealthy citizens, and that we have higher federal and provincial income taxes than New Yorkers do.

If Toronto ever got income or sale taxes it would likely be a percentage (ie. 1%) of an existing amount. Therefore, people wouldn't necessarily be paying more, just that the funds would go directly into city coffers instead of being wittled down by senior governments. I don't understand how the wealthy citizens of NYC play into your argument?$@#?

useless projects like recreation centres

I think your argument lost most of its credibility right about...HERE.

and make work projects to fight gun crime. Gee, that's really working! 4 shot to death in one night over the weekend.

Crime is down significantly this year. We have crazy weekends every year where violence spikes. It's all pretty normal, but indeed sad. The feds are also not giving Miller (and Canadian cities in general) the tools they needs to fight guns on our streets.

Miller needs to be stopped now, and the citizens need to let him know they will not allow any more tax increases without a decade long wage freeze for all city workers.

And you know for a fact that Toronto workers are making way more than workers in other Canadian cities? I've never read such a thing.

Also, why so quiet about the $9 billion that is generated -- yet leaves -- this city every year? Toronto's problems (and increasingly every other Canadian city's problem) is the way in which this country/province is set-up. The system is basically broke. The areas that generate the wealth are penalized to a degree that is putting our entire country's future economic success in doubt. Freezing our public employees wages for a few years isn't going to fix that.

 

[theman23]

3cp1, you still haven't backed up your original claims with some facts. Why do you say city workers are being over paid? Their wages per hour for TTC operators and police are in line with other cities (Vancouver, Calgary). If they are being paid extra, it is due to excessive overtime. In that case, the solution would be to hire more workers. Also, Darkstar is right. Murders up are up this year, but that is due to the random spike of murders this weekend. Crime is down significantly across the board. There has been a 27% reduction in gun crimes, and 40% reduction in gun crime victims so far this year when compared to 2006. And 2006 had a crime decrease compared to 2005.

 

[afransen]

So what the hell is your point, Hydrogen? Why the poor granny routine? She's paying the taxes that are decided by the duly elected representatives of the City of Toronto, fully in accordance with the principles of our representative democracy.

 

[Junglab]

The Star loves to support Miller's tax and spend ways while totally ignoring how overpaid city workers are and how bloated the bureaucracy is. I just read an article where Miller said he hoped Toronto would get the same taxing powers as New York City. That would mean not only a land transfer tax, but get ready for this, an income tax and a sales tax. He doesn't seem to realize that Toronto is not New York, which has a far more prosperous economy, and a far greater pool of wealthy citizens, and that we have higher federal and provincial income taxes than New Yorkers do.

Actually, if I recall correctly every municipality has the right to levy sales and income taxes in the states - not just the "prosperous ones" like New York. Furthermore, New York (for one) had these taxes even during the early nineties - it's so-called dark ages.

With respect to total tax burden, Canada actually has (surprise surprise) fairly comparable levles to those in the states. I know this sounds like heresey, but numerous sources, including the recent TD report, have demonstrated this to be the case. Income taxes, I will grant you, are indeed lower in the states, but it is the total tax burden which ought to be considered if you want to compare a government's "take" fro its citizens.

If Miller gets his way with the land transfer, you can be sure it will only whet his appetite for more of your money to increase city workers' wages even more and pay for useless projects like recreation centres and make work projects to fight gun crime. Gee, that's really working! 4 shot to death in one night over the weekend.

So are you ready for a municipal income tax and sales tax? Because that's what Miller will push for next. I guarantee it. Miller needs to be stopped now, and the citizens need to let him know they will not allow any more tax increases without a decade long wage freeze for all city workers. Then maybe the increased revenue for the city would actually be put to work to improve the city instead of lining the pockets of city workers at taxpayers' expense.

Although your rhetoric is completely over the top, I will admit that certain policies instituted by Mayor Miller can be considered union-friendly (i.e. stipulating that private companies bidding on municipal contracts must pay 90% or better of the going union wages; the recent collective bargaining agreements which saw wages rise far faster vs. inflation). However, this must be tempered by a few observations:
1) the citizens of Toronto had 2 opportunities to elect conservative mayors in place of Miller - one of whom was actually credible. It's not like his sympathies with resepct to organized labour are a closely-held secret. You and I may have our opinions on whether these policies are appropriate, but the majority of those who voted either beleive them to be so, or consider other of his policies to be more important - otherwise they would not have elected him;
2) the city's employment has largely been frozen since Miller became Mayor. the major areas of growth were provincially mandated services and the TTC. Of these, the former services and staffing levels are non-negotiable, while the later is currently understaffed, as revealed by the amount of overtime hours logged by system operators. Indeed, reports indicate that most city departments are understaffed - the backlog in the urban planning deparetment, for instance, is well-known, and is directly responsible for lost opportunities such as the Queen West fiasco. Morevoer, sources indicate that working conditions in some such departments are so poor that even vacant (but funded) positions remain unfilled - it is thus possible that increased wages at city hall may, in part, be due to the fact that fewer people doing more work require greater compensation.

It is a sad city indeed that can't afford to either hire or maintain a sufficient staff to perform its fundamental obligations, and whose councillors are denigrated for raising wages to what is, after all, the GTA average. It is true that wages are a problem, but they do not exist in isolation from other, more pernicious factors in the city's labour climate.

I won't even comment on your farsical rant on recreation centres and the like. And with respect to the absolutely ridiculous comment about this week's gun crimes, please note that spikes in any observation are likely to occur - attributing any sort of statistically relevant effect to these is not only poor judgement - it's downright dangerous.

 

[3cp1]

OK, I know you all hate the Sun, but here's a recent article that shows:
-the average city salary tops $60,000 per year
-the number of city employees earning $100,000 and above more than doubled between 2004 and 2006 (that is, during Miller's first term in office.)
-a city of Toronto cleaner makes on average $20.91/hr., a parks labourer $20.45/hr. and a garbage collector $23.38/hr. Needless to say, these allegedly "competitive" salaries (which do not include some 23% extra in benefits) far surpass what's paid for similar duties in the private sector.
-operating costs contracted out amount to $444 million or a mere 5% of this year's $7.79-billion budget.
-Miller refuses to consider unpaid time off for staff, similar to "Rae Days"
-Miller refuses to contemplate reversing city council's recent pay raise

 

[theman23]

stipulating that private companies bidding on municipal contracts must pay 90% or better of the going union wages; the recent collective bargaining agreements which saw wages rise far faster vs. inflation

Can anyone clarify on this? I see that the policy has been around since 1893. Did Miller change the terms of the policy?