Toronto's Budget (aka please save us upper levels of government)

[EnviroTO]

I posted this in another thread in response to yet another news article where Toronto has no money and is begging to the province and federal government for help.

Common themes:

• Toronto is special.
• The city spent money on a study to make the city great, or has some idea to make the city great... but some other level of government needs to pay for it.
• Province does everything wrong, federal government does everything wrong, and the city is perfect.

Frustrations/Observations:

• The city continues to avoid taking the steps to make a truly balanced budget protecting homeowners who have benefited greatly from growth in property values and all the other benefits from the economy we had over the past 15 years with low interest rates.
• The greatest residential tax rate burden is on older multi-residential buildings and passed on to the renter (the people who have benefited the least from growth in property values).
• The greatest residential tax rate on older multi-residential buildings is being levied on the most efficient to service property (for 100 residences there is one water pipe hook up, one sewer hookup) and community costs are covered by the building (pipes, walkways/hallways, driveways) that in a subdivision would have been a city expense.
• The city continues to do studies (which costs money because staff are not free) when there is no money being saved to pay for the actual implementation of these things.
• Capital expenses, including ones to deal with end of service life replacements, keep being deferred and the future isn't cheaper.
• City councillors that have their own level of government to manage calling out the mismanagement of things outside their jurisdiction without cleaning up their own backyard.
• This is the largest city in Canada so there are more people to divide the costs over.
• The city in general is more compact and dense than others which means there should be cost efficiencies for capital expenses and their maintenance. A 100m of pipe serves more people, 100m of sidewalk serves more people, 100m of road serves more people,etc.
• One of the reasons for unaffordable housing costs (besides the long period of low borrowing costs allowing people to continually sell over asking price) is pure market economics and what people can afford. The dwindling property tax rate as compared to other residential costs made it possible for people to afford / drive-up the costs of housing without any benefit to the city.

Solutions:

• The city needs to stop planning for shiny new things when it can't afford what it has. Look at what is in the backlog, inventory all the existing services being provided, and get real.
• The city needs to spend less time discussing the inadequacies of other levels of government, and focus on what they have the power to change considering they were not elected to manage provincial or federal projects.
• The city tax rate should be mid-pack with other Ontario communities before complaining about how broke it is. If the multi-residential rate of 0.94% makes sense for the most efficient use of land and infrastructure, then it should make sense for the least efficient use of land and infrastructure.

City	Avg Home	Home Rank	Tax Rate	Tax Rate Rank	Tax	Tax Rank
Caledon	$1,709,975	1	0.80%	24	$13,680	1
Windsor	$714,650	22	1.81%	1	$12,935	2
Whitby	$991,105	12	1.12%	17	$11,100	3
Oakville	$1,487,485	2	0.72%	30	$10,710	4
Pickering	$981,563	14	1.08%	21	$10,601	5
Ajax	$968,767	15	1.09%	19	$10,560	6
Orangeville	$783,615	18	1.33%	10	$10,422	7
Aurora	$1,363,412	3	0.76%	29	$10,362	8
Oshawa	$782,227	20	1.30%	11	$10,169	9
Peterborough	$693,871	26	1.44%	6	$9,992	10
Brampton	$1,003,263	11	0.96%	23	$9,631	11
Hamilton	$782,611	19	1.20%	14	$9,391	12
Guelph	$810,200	17	1.14%	16	$9,236	13
Newmarket	$1,124,974	7	0.79%	26	$8,887	14
Barrie	$729,500	21	1.21%	13	$8,827	15
London	$630,282	29	1.38%	8	$8,698	16
Kingston	$636,150	28	1.36%	9	$8,652	17
Richmond Hill	$1,317,247	4	0.65%	33	$8,562	17
Cambridge	$714,650	22	1.18%	15	$8,433	19
St. Catharines	$582,100	31	1.44%	6	$8,382	20
Niagara Falls	$640,000	27	1.30%	11	$8,320	21
Vaughan	$1,251,465	6	0.66%	32	$8,260	22
Burlington	$1,060,052	9	0.77%	28	$8,162	23
Markham	$1,282,561	5	0.63%	34	$8,080	24
Mississauga	$987,356	13	0.80%	24	$7,899	25
Kitchener	$714,650	22	1.10%	18	$7,861	26
Waterloo	$714,650	22	1.09%	19	$7,790	27
Halton Hills	$966,031	16	0.79%	26	$7,632	28
Milton	$1,031,770	10	0.68%	31	$7,016	29
Sudbury	$436,000	32	1.54%	5	$6,714	30
Toronto	$1,093,097	8	0.61%	35	$6,668	31
North Bay	$400,593	33	1.56%	4	$6,249	32
Ottawa	$624,003	30	1.00%	22	$6,240	33
Thunder Bay	$309,310	34	1.59%	2	$4,918	34
Sault Ste. Marie	$296,629	35	1.58%	3	$4,687	35

 

[Northern Light]

I posted this in another thread in response to yet another news article where Toronto has no money and is begging to the province and federal government for help.

Common themes:

• Toronto is special.
• The city spent money on a study to make the city great, or has some idea to make the city great... but some other level of government needs to pay for it.
• Province does everything wrong, federal government does everything wrong, and the city is perfect.

Frustrations/Observations:

• The city continues to avoid taking the steps to make a truly balanced budget protecting homeowners who have benefited greatly from growth in property values and all the other benefits from the economy we had over the past 15 years with low interest rates.
• The greatest residential tax rate burden is on older multi-residential buildings and passed on to the renter (the people who have benefited the least from growth in property values).
• The greatest residential tax rate on older multi-residential buildings is being levied on the most efficient to service property (for 100 residences there is one water pipe hook up, one sewer hookup) and community costs are covered by the building (pipes, walkways/hallways, driveways) that in a subdivision would have been a city expense.
• The city continues to do studies (which costs money because staff are not free) when there is no money being saved to pay for the actual implementation of these things.
• Capital expenses, including ones to deal with end of service life replacements, keep being deferred and the future isn't cheaper.
• City councillors that have their own level of government to manage calling out the mismanagement of things outside their jurisdiction without cleaning up their own backyard.
• This is the largest city in Canada so there are more people to divide the costs over.
• The city in general is more compact and dense than others which means there should be cost efficiencies for capital expenses and their maintenance. A 100m of pipe serves more people, 100m of sidewalk serves more people, 100m of road serves more people,etc.
• One of the reasons for unaffordable housing costs (besides the long period of low borrowing costs allowing people to continually sell over asking price) is pure market economics and what people can afford. The dwindling property tax rate as compared to other residential costs made it possible for people to afford / drive-up the costs of housing without any benefit to the city.

Solutions:

• The city needs to stop planning for shiny new things when it can't afford what it has. Look at what is in the backlog, inventory all the existing services being provided, and get real.
• The city needs to spend less time discussing the inadequacies of other levels of government, and focus on what they have the power to change considering they were not elected to manage provincial or federal projects.
• The city tax rate should be mid-pack with other Ontario communities before complaining about how broke it is. If the multi-residential rate of 0.94% makes sense for the most efficient use of land and infrastructure, then it should make sense for the least efficient use of land and infrastructure.

I'm not sure we need a separate thread for this, and I have regularly discussed Toronto's budget every single year within the Mayoral thread of the day.

But its here.............

You make a series of points on studies and capital projects and over -charging multi-res buildings with which I agree, and these have been discussed many times before.

There is money to be saved on what what I call 'The Consultant Enrichment" scheme.

We could debate the final number, but its not a penny under 10M per year.

That said, the City's needs far exceed a reallocation of 10M.

A straightline tax hike to 0.94 mil rate on SFH homes is not happening. LOL

You're talking about a 108% tax increase.

You're talking about taking the typical Toronto homeowner's property tax bill to $14,000 from under $7,000

Aside from this being a political non-starter, there would literally be riots and a whole slew of bankruptcies.

****

The City is prohibited by law from increasing the multi-res rate or the commercial rate.

So for all intents and purposes, any increase is entirely on the SFH class with a few small exceptions.

****

So how much could you raise anyway?

The City currently collects 4.9B in property tax (2023 budget)

This is roughly 30% of what the City spends in a year, the rest comes from Land Transfer Tax, Water Rates, Garbage Rates, Hotel Tax, Vacant Home Tax, User Fees (TTC fares, Recreation fees) and Transfers.

The residential property class ( SFHs inclusive, but excluding multi-res) represents 58% of total property tax revenue.

So, yes, in theory, if you could pass a 108% property tax increase you would generate 2.84B per year.

This, it should be said would entirely fix the operating side of things, but would do surprisingly little for the capital side.

You need 1.5B just to arrive at balance next year; so that leaves a net gain of 1.34B, if you could pass the hike and collect those revenues, neither of which is true.

But if you were to restore Miller-era TTC loading standards, and implement 40-ride caps on TTC fares, plus add some needed service for shift workers overnight, you would chew up probably 1/3 of the above.

Add 1,000 shelter beds, just to meet demand, and you're talking another 50M - 100M

Want to increase litter pick-up, mowing, flower bed maintenance etc etc.

****

But now let's come back to something more realistic.

A final rate that simply meets in the middle between the current multi-res rate, and the current residential rate, with a factor for additional charges in Toronto, such as garbage.

I would suggest a .mil rate closer to .60 is more realistic.

That's still a 33% increase from today's value; but would generate only 938M.

A reduction to .60 for Multi-res would result in a reduction of 310M in annual revenue

This gives net income of 628M.

It too would never happen in one year, but maybe over four, if the political will were there.

Again, the opening deficit merely to fund the status quo is 1.5B

****

The unmet capital needs, however, are gargantuan.

Unfunded needs are already 29B over the next decade, or 3B annually every single year.

Most here would rate that list of projects as incomplete and insufficiently ambitious.

 

[afransen]

The unmet capital needs, however, are gargantuan.

Unfunded needs are already 29B over the next decade, or 3B annually every single year.

Most here would rate that list of projects as incomplete and insufficiently ambitious.

If Toronto is really in that deep a financial hole, perhaps 108% tax increase is warranted, even if phased in over several years. The answer can't and won't be $3B annual grant from senior levels of government.

 

[EnviroTO]

I'm not saying that this issue can be fixed overnight. It took years of mismanagement to create this backlog of necessary projects and this significant gap in the budget. But, as has been stated, upper level government handouts can't be the solution. That is unsustainable and Toronto isn't a "have not" region so taking taxes from elsewhere to solve budget issues here makes no sense.

Why has the tax rate been allowed to go down continually over the past few decades? Clearly it wasn't because the city was flush with cash or was saving for committed projects and end of life replacement infrastructure.

If the tax rate had stayed the same there would be no shock now. With sales tax or income tax prices rise, the tax rate stays the same, the government has more money to deal with inflationary pressures and a higher cost of capital projects. With the city prices go up, tax rate goes down, city can't figure out why it doesn't have a budget that kept up with the cost of delivering capital projects and services.

 

[just east of the creek]

I'm not sure we need a separate thread for this, and I have regularly discussed Toronto's budget every single year within the Mayoral thread of the day.

But its here.............

You make a series of points on studies and capital projects and over -charging multi-res buildings with which I agree, and these have been discussed many times before.

There is money to be saved on what what I call 'The Consultant Enrichment" scheme.

We could debate the final number, but its not a penny under 10M per year.

That said, the City's needs far exceed a reallocation of 10M.

A straightline tax hike to 0.94 mil rate on SFH homes is not happening. LOL

You're talking about a 108% tax increase.

You're talking about taking the typical Toronto homeowner's property tax bill to $14,000 from under $7,000

Aside from this being a political non-starter, there would literally be riots and a whole slew of bankruptcies.

****

The City is prohibited by law from increasing the multi-res rate or the commercial rate.

So for all intents and purposes, any increase is entirely on the SFH class with a few small exceptions.

****

So how much could you raise anyway?

The City currently collects 4.9B in property tax (2023 budget)

This is roughly 30% of what the City spends in a year, the rest comes from Land Transfer Tax, Water Rates, Garbage Rates, Hotel Tax, Vacant Home Tax, User Fees (TTC fares, Recreation fees) and Transfers.

The residential property class ( SFHs inclusive, but excluding multi-res) represents 58% of total property tax revenue.

So, yes, in theory, if you could pass a 108% property tax increase you would generate 2.84B per year.

This, it should be said would entirely fix the operating side of things, but would do surprisingly little for the capital side.

You need 1.5B just to arrive at balance next year; so that leaves a net gain of 1.34B, if you could pass the hike and collect those revenues, neither of which is true.

But if you were to restore Miller-era TTC loading standards, and implement 40-ride caps on TTC fares, plus add some needed service for shift workers overnight, you would chew up probably 1/3 of the above.

Add 1,000 shelter beds, just to meet demand, and you're talking another 50M - 100M

Want to increase litter pick-up, mowing, flower bed maintenance etc etc.

****

But now let's come back to something more realistic.

A final rate that simply meets in the middle between the current multi-res rate, and the current residential rate, with a factor for additional charges in Toronto, such as garbage.

I would suggest a .mil rate closer to .60 is more realistic.

That's still a 33% increase from today's value; but would generate only 938M.

A reduction to .60 for Multi-res would result in a reduction of 310M in annual revenue

This gives net income of 628M.

It too would never happen in one year, but maybe over four, if the political will were there.

Again, the opening deficit merely to fund the status quo is 1.5B

****

The unmet capital needs, however, are gargantuan.

Unfunded needs are already 29B over the next decade, or 3B annually every single year.

Most here would rate that list of projects as incomplete and insufficiently ambitious.

Major cities are expensive places to live, work, employee, play and travel to. That is the nature of the beast. So yes to a multi year program of property tax increases that will see a further billion or so (to start) in the coffers. And yes to parking taxes and several of the other items that have been discussed in various threads. The city needs revenue, and sure it can save money in some areas or depts, but not the amounts required to fund future budgets ( or we would be very surprised at such a revelation). And as a city based employer, but not currently a city based resident ( a GTA resident), getting the cities taxation rates in line with the GTA seems an important step, before hitting up other levels of government for funding.

I do believe that there needs to be a new recognition from the province and the Feds that Toronto (and Montreal, and Vancouver) are special places generating enormous amounts of economic activity both directly and as spin-offs to their importance and relevance. And as such, certain city building and operating activities should be partner funded in stable longterm programs to allow for proper funding of the TTC, major capital projects (subways, sewers etc), and certain aspects of social services and housing. Toronto attracts more than its share of people/families struggling to survive and move forward. Mental health and destitution, immigration, low income, or lower incomes - all of these require stable, ongoing inputs from other levels of government (unless you are going to give the city other ways of generating funds). Doug Ford ( and local conservative party leadership) are quite firm in the belief that they will go to the polls secure in the knowledge that they are, or will be balancing their budget. But at what cost? That cost is mostly Toronto, but other municipalities are part of this cost as well.

With Canadas total debt sitting at about 2.1 Trillion $, and most levels of provincial ,and federal governments trying to reign in costs, it would seem that taxation is going to be the major road to revenue generation.

 

[EnviroTO]

I do believe that there needs to be a new recognition from the province and the Feds that Toronto (and Montreal, and Vancouver) are special places generating enormous amounts of economic activity both directly and as spin-offs to their importance and relevance. And as such, certain city building and operating activities should be partner funded in stable longterm programs to allow for proper funding of the TTC, major capital projects (subways, sewers etc), and certain aspects of social services and housing. Toronto attracts more than its share of people/families struggling to survive and move forward. Mental health and destitution, immigration, low income, or lower incomes - all of these require stable, ongoing inputs from other levels of government (unless you are going to give the city other ways of generating funds).

There needs to be recognition that the GTA is 15% of Canada's population and Toronto is half of that to be sure, that cities receive a disproportionate amount of immigration and related costs, and the housing affordability crisis was driven by area's of federal jurisdiction more than provincial or municipal policies. There should be recognition that health is a provincial responsibility, including mental health. If the city was focused on saying federal government needs to come to the table on housing, and the province needs to come to the table on the challenges of mental health I have no issue with that because there is a logical connection to costs and ownership of the problem and solution. However, for something like TTC operating costs... why is that a provincial or federal responsibility? The city fights against TTC uploading but then complains it can't pay the bills... that is irrational. There is nothing wrong with the TransLink plus BC Transit model. The city should instead be setting the conditions of uploading (service minimums that the city has maintained and an ability to use city funding to develop a route that is deemed a city priority or objective).

The province and federal government are investing in Toronto already. Toronto Waterfront is a massive project funded by all levels of government and the massive transit expansion is largely being paid for by the province. I would expect that with Toronto being a big part of the population of Canada that as upper levels of government have infrastructure investment programs that the city will be able to apply to get its fair share of those programs. I would not expect that it is the responsibility of the federal government and province to bail out the city for things that clearly fall under city jurisdiction and for which federal or provincial policy had no part in driving.

 

[Northern Light]

There needs to be recognition that the GTA is 15% of Canada's population and Toronto is half of that to be sure, that cities receive a disproportionate amount of immigration and related costs, and the housing affordability crisis was driven by area's of federal jurisdiction more than provincial or municipal policies. There should be recognition that health is a provincial responsibility, including mental health. If the city was focused on saying federal government needs to come to the table on housing, and the province needs to come to the table on the challenges of mental health I have no issue with that because there is a logical connection to costs and ownership of the problem and solution. However, for something like TTC operating costs... why is that a provincial or federal responsibility? The city fights against TTC uploading but then complains it can't pay the bills... that is irrational. There is nothing wrong with the TransLink plus BC Transit model. The city should instead be setting the conditions of uploading (service minimums that the city has maintained and an ability to use city funding to develop a route that is deemed a city priority or objective).

The province and federal government are investing in Toronto already. Toronto Waterfront is a massive project funded by all levels of government and the massive transit expansion is largely being paid for by the province. I would expect that with Toronto being a big part of the population of Canada that as upper levels of government have infrastructure investment programs that the city will be able to apply to get its fair share of those programs. I would not expect that it is the responsibility of the federal government and province to bail out the city for things that clearly fall under city jurisdiction and for which federal or provincial policy had no part in driving.

So, you would like to see the City more or less accept its 'core service' obligations; but agree that senior levels of government should fully fund social services/health/childcare.

Sold!

Annual subsidy to operate Toronto Community Housing (formerly the provincial agency MTHA) - 273 million
Net Expenditures on Social Assistance - 77.6M
Net Expenditures on Homeless Shelters - 491.7M
Net Expenditures on Long Term Care - 93.5M
Net Expenditures on Childcare - 90.4M

Total Social Service / Health expenditures for upload - 1, 032, 000, 000 (1 billion and 32 million)

The rest belongs to the City, fair game!

Now, that's only the operating side.

The City is also carrying debts that it accrued to serve those obligations.

Source: https://www.toronto.ca/city-government/budget-finances/city-budget/notes-reports-and-presentations/

****

One more thing though, let the City charge tolls on its highways if you don't upload them.

At 407 toll rates (with a transponder) you pay $8.72 per trip for a 16km trip. That's roughly the distance on the DVP from 401 to an exit at Gardiner/Jarvis.

So daily revenue of ~ $15 per highway user - 100,000 daily users - but not all will take the max trip, so we'll slash that to 60,000 - Somewhere in the area of 300M annually

The Gardiner is about 40% busier, so let's add another 420M that gets us 720M per year, or 7.2B over 10 years for Transportation Capital Projects.

I'm fine w/that

The rest of the City's obligations should be financed through a significant tax hike.

 

[EnviroTO]

Annual subsidy to operate Toronto Community Housing (formerly the provincial agency MTHA) - 273 million
Net Expenditures on Social Assistance - 77.6M
Net Expenditures on Homeless Shelters - 491.7M
Net Expenditures on Long Term Care - 93.5M
Net Expenditures on Childcare - 90.4M

How are these city responsibilities?

• Community housing, social assistance, and homeless shelters: How is this not tied to welfare (rebranded Ontario Works), unemployment, etc? If welfare goes down the problem would go up. How can the city own half of this equation??
• Long Term Care: How is this not tied to healthcare? People get kicked out of the hospital and end up in long term care. Again, the city can't own half of an equation.
• Childcare: This exists so that people can work and work pays income tax to the federal and provincial governments. If the parent can't afford to pay for childcare then subsidized childcare is a welfare. If it is early childhood education, education is provincial. How does it make sense this is owned by the city?

 

[Northern Light]

How are these city responsibilities?

• Community housing, social assistance, and homeless shelters: How is this not tied to welfare (rebranded Ontario Works), unemployment, etc? If welfare goes down the problem would go up. How can the city own half of this equation??
• Long Term Care: How is this not tied to healthcare? People get kicked out of the hospital and end up in long term care. Again, the city can't own half of an equation.
• Childcare: This exists so that people can work and work pays income tax to the federal and provincial governments. If the parent can't afford to pay for childcare then subsidized childcare is a welfare. If it is early childhood education, education is provincial. How does it make sense this is owned by the city?

I agree.

But these are mandated costs imposed by the province for the most part, which the City has little or no choice but to eat.

All municipalities in Ontario pay a portion of the cost of Ontario Works/ODSP by legislative fiat from Ontario.

In other cases, for instance, the province pays for Long Term care beds by giving the operator (in this case the City) a per diem subsidy, per bed.

But the province provides the same subsidy no matter the cost of the land or the cost of the staff, both of which are more expensive in Toronto, as are the construction costs. (project is debt-financed and those costs recovered via the per diem)

Toronto ends up eating the difference between what the province pays, and what it costs.

 

[EnviroTO]

I wonder if the city should create a separate corporation with its own board and budget to run Toronto Social. Their motto can be "We exist to deliver the mandates of the provincial and federal government." When the city asks for money it can be clear if this is money for Toronto Social vs Toronto City. For things that the city has taken on optionally, it is probably time to get out... sell the long term care to Chartwell. Do I think that long term care should be run privately... no, it should be run by the province. But more importantly than the private vs public, it shouldn't be run by the city because healthcare is provincial. To me the city running long term care facilities would be like the city having after school education programs to deal with the inadequacy of provincial education... it would be the city taking on something that while done with good intention doesn't put the ownership where it should be.

 

[Dr. Snoot]

I'm not saying that this issue can be fixed overnight. It took years of mismanagement to create this backlog of necessary projects and this significant gap in the budget. But, as has been stated, upper level government handouts can't be the solution. That is unsustainable and Toronto isn't a "have not" region so taking taxes from elsewhere to solve budget issues here makes no sense.

Why has the tax rate been allowed to go down continually over the past few decades? Clearly it wasn't because the city was flush with cash or was saving for committed projects and end of life replacement infrastructure.

If the tax rate had stayed the same there would be no shock now. With sales tax or income tax prices rise, the tax rate stays the same, the government has more money to deal with inflationary pressures and a higher cost of capital projects. With the city prices go up, tax rate goes down, city can't figure out why it doesn't have a budget that kept up with the cost of delivering capital projects and services.

This reflects a common misunderstanding of property taxes. Yes, the City sets a property tax rate, but only for the purposes of raising a specific amount of revenue.

The actual amount of property taxes paid depends on the assessed value of the property. For example, a $500,000 property at a 1% rate would pay the exact same amount of money as a $1,000,000 property at a 0.5% rate. So really, the rate tells you nothing about how much property taxes have increased or decreased over time.

The truth is that residential property taxes in Toronto have increased over time, though not much more than the rate of inflation (NOTE: The chart below is from the pre-Tory era of increases limited to inflation). Non-residential property taxes and total property taxes have decreased over time when compared with inflation. As a result, property taxes have decreased as a percentage of Toronto's overall operating budget over time.

Source: City of Toronto

I think it is fair to say that Toronto's property taxes should have increased at least by the rate of inflation, plus population growth, plus any increase in the cost of delivering municipal services to residents of Toronto. However, this would be a much smaller increase than one imagines and would not come even remotely close to solving Toronto's budget problems.

A major issue is that over time the provincial and federal governments have downloaded costs onto municipalities that they did not traditionally bear, without providing them additional funding or revenue tools. For example: social housing, mental health care, public health costs, social assistance, provincial court administration, provincial highway maintenance, property assessment, capital and operating costs for transit, paramedic services, and shelter costs for immigrants and refugees. The list goes on and on. Compared to other municipalities, Toronto bears a disproportionate amount of these costs due to its nature as the largest City in Canada. However, inadequate municipal funding is a problem across Ontario, not just in Toronto. The majority have some sort of fiscal imbalance that has required large property tax increases in the past few years, including municipalities that already charge relatively higher residential property taxes. Toronto is merely the largest and most obvious example.

The answer should not be residential property tax increases for several reasons:

1. They were never meant to cover the massive and variable costs of social services;
2. They can be a regressive tax that has a higher impact on lower income households;
3. They are extremely unpopular and difficult to increase; and
4. Residential property taxes have been increasing as a percentage of municipal tax revenues over time.

Perhaps the best argument that the shortfall should not entirely come from increased residential property taxes is that the federal government has the fiscal room to increase transfers to provinces or municipalities without increasing spending (Source). Property owners in Toronto should not have to accept increased taxes where taxes have already been levied.

 

[EnviroTO]

This reflects a common misunderstanding of property taxes. Yes, the City sets a property tax rate, but only for the purposes of raising a specific amount of revenue.

The actual amount of property taxes paid depends on the assessed value of the property. For example, a $500,000 property at a 1% rate would pay the exact same amount of money as a $1,000,000 property at a 0.5% rate. So really, the rate tells you nothing about how much property taxes have increased or decreased over time.

I am aware of how property taxes are currently set. However the current method (set a budget then calculate the rate) is part of the problem. When the average price of a new car went up 50% over the last 10 years nobody says "why do taxes keep going up" when clearly taxes collected on a car went up 50% if the price went up 50%. The sales taxes are collecting more from the people, the income taxes being collected are higher, etc. Why wouldn't taxes the city collects be set in the same way?? Does anyone believe the city budget has a protective shield against the same inflationary pressures that exist elsewhere in the market? The current method of calculating and stating property taxes leads to some of the political cowardice we see in tax collection. When the province says they will hold the line on income tax, they will collect more. When the city says they will hold the line on taxes they are basically saying they aren't going to keep up with inflation and will need to find ways to cut. That is messed up.

 

[Northern Light]

I am aware of how property taxes are currently set. However the current method (set a budget then calculate the rate) is part of the problem. When the average price of a new car went up 50% over the last 10 years nobody says "why do taxes keep going up" when clearly taxes collected on a car went up 50% if the price went up 50%. The sales taxes are collecting more from the people, the income taxes being collected are higher, etc. Why wouldn't taxes the city collects be set in the same way?? Does anyone believe the city budget has a protective shield against the same inflationary pressures that exist elsewhere in the market? The current method of calculating and stating property taxes leads to some of the political cowardice we see in tax collection. When the province says they will hold the line on income tax, they will collect more. When the city says they will hold the line on taxes they are basically saying they aren't going to keep up with inflation and will need to find ways to cut. That is messed up.

Agree here.

The legislation essentially lowers the .mil rate to generate the same as last year when assessments rise, other than assessment growth.

That's a very strange way to do things.

It would make more sense to have a set mil rate, and if assessment grows, so does revenue. Council would still be free to vote to lower or raise the rate; the default would capture increased wealth.

 

[Admiral Beez]

I would gladly pay double my current property tax if it went to cleaning up this city.

 

[DSC]

I would gladly pay double my current property tax if it went to cleaning up this city.

As it is very unlikely to happen, that is easy to say - I too would like higher city tax for more adequate service but I bet neither of us would be too happy with doubled taxes if all they did was better 'cleaning'.