A balanced Toronto budget with no deep cuts
The Wellesley Institute and the Canadian Centre for Policy Alternatives have beaten city council to the punch and balanced Toronto's 2012 operating budget. Just like that.
Except there is pretty much zero chance that council will vote in favour of a 6 per cent hike in property taxes. Also, even the mushy middlers on council say they want to get away from the past practice of relying on unpredictable windfalls, like last year's surplus, to balance the books.
The proposed budget, released Thursday, seeks to puncture Ford's budget balloon right at the start.
"The City of Toronto is not in a severe financial crisis and without options, as the rhetoric coming
from the mayor’s office would have us believe," writes economist Sheila Block.
Here is her recipe to get (almost) to a zero shortfall:
• Measures already announced by the city (TTC fare increase and increases in revenues) will bring the deficit down by $131 million.
• Reversing last year’s ill-advised decision to freeze property taxes and increasing this year’s property tax rate by 3 per cent (a total increase of 6 percent, reflecting two years’ worth of normal
increases) would increase revenues by $136 million.
• If the city matches the average amount it has saved over the last five years through cost cutting and efficiencies, costs will be reduced by $98 million;
• Over the last five years, the surplus from the previous year has averaged $181 million. Assuming
this year is no different, that amount could be applied to this year’s budget;
• Another $188 million can be found by accessing the $88 million from the 2010 surplus that was
put into a tax stabilization fund and by readjusting the projected increase in costs of salaries
and benefits to reflect a more likely increase of $116 million (double last year’s increase).
Block says those moves would shrink the shortfall to $41 million, less than the cost to the city of council cancelling the car registration tax last year.
The actual proposed budget, to be released Nov. 28, will include a combination of layoffs and deep spending cuts.