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Homeowners face 4% tax hike

argos

argos

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John Spears
City Hall Bureau

Toronto residential property taxes will rise by 4 per cent in 2009 - an increase of $89 on a home assessed at $387,000, according to the budget unveiled this morning.

Under the$8.7 billion budget proposal, the total take from property taxes will rise by 2.5 per cent. But in keeping with the city's long-term policy of easing business property tax rates, homeowners pick up a greater share of the increase.

Mayor David Miller said the increase amounts to 25 cents a day.

Councillor Shelley Carroll, the city's budget chief, said there are "no major service reductions" contemplated in the budget plan.

Some user fees on recreation programs will also increase. But the land transfer tax and the vehicle tax will not increase, Miller said.

Miller said higher costs for transit, policing, snow clearance and welfare are the main factors driving the city's costs up. The city managed to find $100 million in cost savings to offset the higher spending, he said.

Miller said that programs to cancel or defer tax increases for low-income earners and seniors will be expanded. That means another 22,000 families will qualify for assistance, Miller said.

But he said the city can still manage to pay its bills.

"We are introducing our second consecutive budget balanced at its inception," Miller said.
The budget committee will hold public hearings on the budget February 18. The committee also accepts written briefs.

The budget will go to council for final approval at its meeting on March 31 and April 1.

Asked why the city is raising taxes during a recession, Miller said the city isn't legally perrmitted to run an operating deficit. That's in contrast to the federal government, which can run a deficit to stimulate the economy during downturns.

The federal gvernment is running a deficit of roughly $1,000 per Canadian, Miller said, but sooner or later that money must be paid for through the tax system. The city, meanwhwile, is boosting taxes about $89 per household.

"Municipal governments can't run a deficit," he said. "People want their services. We have to keep their services going. We have to kkeep building a city. We have to invest in people and our environment. And to do that you need to pay a little bit more."
Click to expand...

Source: http://www.thestar.com/News/GTA/article/585103
 
Okay, Statscan gives the CPI inflation rate for the past year as being around 2%. The total tax collection from property taxes is going up 2.5%. So it's only .5% above what would otherwise be a business-as-usual situation.

Everyone in hysterics, take a valium.

They really need to change the way municipalities report their taxes. I don't see many people complaining that "I got a 10% price-of-living wage increase, but then I saw that the government increased how much tax they collect from me by 10%!". Well, duh! But this is what we go through every year at municipal budget time.
 
I agree, this isn't exactly earth-shattering. The alternative is a property tax freeze, and they seem to lead to trouble, in the long run. Small, predictable increases are certainly preferable to a huge hike every five years or so. Although the latter does a better job at getting a mayor and city council re-elected.

I remember reading about a study last year that showed that Toronto residents enjoy a much higher level of municipal services than those who live in the outer suburbs. In addition, IIRC, residential property taxes are significantly lower here. Essentially, residents are being subsidized by our strong commercial sector.

It doesn't sound like such a bad deal, when you think about it. Then again, I rent, so maybe I don't know crap.
 
I don't really mind the increase. I live across from a recreation centre and get all my services there anyways so it's worth it. 90 bucks isn't all that much...but I'm in a different situation than most.
 
threnody said:
I remember reading about a study last year that showed that Toronto residents enjoy a much higher level of municipal services than those who live in the outer suburbs. In addition, IIRC, residential property taxes are significantly lower here. Essentially, residents are being subsidized by our strong commercial sector.
Click to expand...
You're right, Toronto has higher commercial taxes and lower residential taxes than the suburbs around it. This situation is gradually being changed year by year, by reducing commercial taxes and increasing residential taxes. The article alludes to that.
 
I know this would need some serious reworking of the City of Toronto Act, but property taxes are dumb. We should switch from taxing property (commercial & residential) to taxing income and consumption. It would have only upside. For starters, we would finally be free of those annoying stories in the Star every year about some grandma whose house has appreciated 10% in a year and she can no longer afford to pay the taxes on it.

As far as I can see, income & sales taxing would:
  • Better reflect an individual's ability to pay tax, by focusing on income/consumption rather than land value
  • Rationalize tax collection by simply rolling the tax into CRA income taxes & the GST/PST/HST
  • Eliminate the MPAC, and its inevitably controversial evalutaions
  • Eliminate the annual uproar about the mill rate increasing
  • Better allow governments to budget appropriately
 
Tuscani01 said:
lol, same here... hence my "Great news!"
Click to expand...

The laugh's on you. As a renter you probably pay the highest amount of municipal tax. It's just hidden in your rent (increase).


Hope you're laughing now.
 
Considering the state of the economy and the slowdown in revenue from the Land Transfer Tax (because of overall decreased home sales), a 4% tax hike is extremely reasonable, considering there will be no cutbacks and some improvements to services, like the TTC.

As MisterF rightly states, a portion of this increase reflects the continuing strategy to shift the tax burden from the commercial to residential base to level the business tax playing field between the 905 and 416.

That being said, it's sad to say that the reserve fund has now been drained completely. For this I don't blame the current administration, but Mel Lastman's. His wacky and frankly idiotic promises of "no tax increases" through the early years of amalgamation pummeled the reserve fund during the "good" years until a more realistic council that approved moderate tax increases annually with inflation came in and the bleeding slowed, but apparently it was too little too late.

It seems ridiculous that during rough economic times, the level of government that is at the front line of the storm (i.e., providing social services) cannot legally run a deficit. The Federal Gov't is running one, the Provincial Gov't is running one, but the City of Toronto cannot. And then you have the Feds cutting taxes. If anything the fiscal imbalance is clear today.
 
I'm glad this thread has kept a cool head about this -- some of the comments at the Star and other places are ridiculous. It's like some people expect taxes to never go up ever.

I do think the point about Toronto being unable to run a deficit is an important one to remember, though. It's time Canadian cities started being able to run themselves.

It's too bad the whole One Cent Now thing never got a lot of traction. I'd be quite happy paying a harmonized 14% sales tax if 1% of that went to cities.
 
I guess we all know where it is coming from... It's obvious that if the city was cash-strapped before, with dropping property values and the increasing burden of social services, there is no way the city is in a better financial position.

I don't want to pay more taxes, but it seems to be a necessary evil.
 
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