Homeowners face 4% tax hike

[Jayomatic]

I have to agree with many issues on this board. The budget definitely has gone up quite alot in the last few years and I don't really see too much of an improvement.

I expect tax increases but when times are tough I think the city is showing it isn't working hard enough to make the best of each and every dollar.

While many of these programs are great to invest in the good times, there should be some constraint when times are tough.

Even a few cuts could have been seen as a gesture that the city is at least trying to conserve some money. For instance, why are they still increasing the city tree planting initiative when the whole tree support system is broken. Whats the point of throwing millions of dollars away when the problems we have with improper irrigation and planting still exist?

How about the city bringing up issues about trying to start discussions about wage freezes for city unions? Sure they'll put up a huge stink but when everyone in the country is either losing their jobs or having to reduce their pay, It could put enough pressure on unions to get this neverending issue in the minds of the public. Lets use this severe recession as a moment in history where the idea of a publicly funded union will no longer be tolerated.

 

[Disparishun]

T
Example 2: Stephen Harper's "cut the GST by 2%" that sucked billions out of Federal coffers right before when we needed it most (i.e., now)

In fairness, cities are a provincial responsibility, and a 1-point cut came exactly when Miller and other mayors were campaigning for a 1-point allocation to cities.

When the cut came, it was time for McGuinty to step up and finish the job by levying it for cities -- and time for Miller to maintain the pressure and focus it on McGuinty finishing the job.

Neither thing happened. McGuinty did not step up. Miller stopped talking about it. On this particular issue, I blame them -- and it's not too late. Why does McGuinty not bold up, hike PST by a percentage point per dollar, and devote that point to public transit in this province? That is something I would gladly vote for.

 

[doady]

They have a reason.

There cities are growing by leaps and bounds....

BS. The growth in the 905 is paid for by development charges. How do you think Mississauga was able to grow rapidly for many years with any tax hikes at all? The 905 actually has less reason to raise taxes than Toronto does. Fewer services and less infrastructure to maintain should mean less taxes.

There is nothing unreasonable at all about Toronto's residential property tax hike, especially considering that the TTC fares are being frozen this year. So Toronto now not only has the lowest residential property tax rate in the GTA, it also has the lowest transit fares in the GTA. Yet all you people do is bitch is about how financially irresponsible the city is. Pathetic.

 

[lordmandeep]

Yet all you people do is bitch is about how financially irresponsible the city is. Pathetic.

It was irresponsible in both extremes. It never raised taxes when it had to and now spends on things it does not need to spend on.

The city's outside have a reason. There development fees have slowed down and really the long term cost of a growing population were never fully recovered by development fees.

 

[Paleo]

It was irresponsible in both extremes. It never raised taxes when it had to and now spends on things it does not need to spend on.

The city's outside have a reason. There development fees have slowed down and really the long term cost of a growing population were never fully recovered by development fees.

In other words, the "city's outside" didn't have a sustainable model either since they're having to make big tax increases as well to maintain current service levels.

 

[Whoaccio]

I don't get this. When we hear the yearly story about 4% tax hike, or whatever, does that mean the rate is increasing by 4% or something else? If it is the actual property tax rate that is being modified, then inflation is a non-issue. The entire point of tax rates, as opposed to a poll tax, is so that taxation is a constant function of some underlying metric of society's ability to pay. In municipal terms, I guess that means land values. Tax rates aren't meant to be adjusted for inflation. Tax rates implicitly take inflation into account by being a function of some kind of inflation sensitive wealth.

When Miller came to office, the operating budget stood at about 7-7.1b current dollars. Given the current 8.7b budget, that means that inflation aside Miller engorged the budget by about 24% (1.7b, in current dollars) or about 4-5% p.a. above and beyond the rate of inflation. Given that the city can't run deficits, this clearly came from taxes.

EDIT: I think most Torontonians could probably just take comfort if this was a once in a while sort of thing, or that services were perceived to be operating effectively. Nobody thinks that though. Even if this tax hike is "acceptable," it isn't acceptable to have tax rate hikes as a yearly feature of Toronto budget making. If for no other reason than it saps confidence in City Hall, or whatever confidence is left in them. At the same time, there is nothing that the city can really point to as the result of the tax hike.

 

[Admiral Beez]

There cities are growing by leaps and bounds....

I don't care about cities over there, I care about our city's finances.

 

[Admiral Beez]

EDIT: I think most Torontonians could probably just take comfort if this was a once in a while sort of thing, or that services were perceived to be operating effectively. Nobody thinks that though.

And that's the issue, IMO. What happens if next year we get another 4% increase in taxes along with another 6% increase in user fees, for another hit of 10%. What if it happens again in 2011? At what point would the Miller fans start to grumble?

 

[Ahab]

I think I need to lend another perspective to this tax increase issue. While I'm not opposed to tax increases generally, I can certainly appreciate the frustration of a lot of taxpayers in Toronto.

Over the years, Miller has pretty much done everything he could possibly do to alienate homeowners. Sure, there is an inherent flaw in the city's capacity to generate revenue. There is an overreliance on property taxes and that's not Miller's fault. He also inherited a financial mess that resulted from the former administration's bad policy choices.

Yet, Miller's solutions have been poorly thought out and extremely ill-timed. They have also been poorly communicated.

If you are a homeowner today, you have seen the following changes over the course of a year:

• you now have to pay a new fee for the city to haul your garbage in addition to wrestling with a new city-issued bin
• you have to pay a new fee if you own a car
• you have to deal with a new blue bin
• you have to pay a lot more for water
• you have to pay a new land transfer tax if you want to buy a new home

I think most homeowners feel like they are under siege from the city. This is especially the case where the mayor's assurances have not come to fruition (e.g. taxes are going to kept at the rate of inflation and the land transfer tax will make this happen). Also, the city has failed to implement new taxes aimed at other taxpayers (e.g. liquor taxes). Compounding the problem is that we are now in the midst of a recession, yet we see city wage increases and continued spending by the city as if everything is normal. So the bottom line is that homeowners are still shouldering a significant property tax burden and they are being nickel and dimed by new fees and taxes.

Miller should have just been frank with everyone and simply raised property taxes by 10 - 15% or whatever was needed a year ago. Sure, there would have been a lot of grumbling, but his "death by a thousand taxes" approach is just torture.

 

[ShonTron]

I just see the venom spouted by the usual suspects and the nuts on the media websites as theraputic. Like taking a virtual valium.

 

[Skeezix]

And my increase is less than 1.8% and doesn't take effect until June... so im still laughing

I think you are missing the bigger picture. Higher property taxes are not good news for renters.

As you know, property taxes are collected on rental buildings. Renters don't pay property taxes directly, but they do pay. Although a new property tax class has been created for newly constructed purpose-built rental buildings, existing rentals are taxed at a commercial rate, far in excess of Toronto's residential rate. So, even though your rent is guideline protected, you may have (depending on the type of your rental accommodation) started off paying an initial rent that was higher than it needed to be because of the onerous tax burden in this city on rental buildings. Even if you didn't, many tenants do.

Existing tenants might not get hit immediately from property tax increases, but in the era of vacancy-decontrol tenant legislation, higher taxes prompt higher rents for vacant units, so new tenants or moving tenants get hit. Over a period of time, it helps accelerate the march towards higher average rents across the city.

So, while I'm glad that your rent is less than 1.8% increase this year, I don't think renters as a class have much to laugh about. Property tax treatment is a key problem vis-a-vis rental affordability in this city.

 

[kEiThZ]

This is what is bothering opponents...it's not the 4%...it's everything else.

PUBLICATION: National Post
DATE: 2009.02.11
EDITION: National
SECTION: News
PAGE: A1C
ILLUSTRATION: Color Photo: Aaron Lynett, National Post / Mayor DavidMiller and budget chief Shelley Carroll answer questions about the city's $8.7-billion operating budget. ; Chart/Graph: / ;
BYLINE: Allison Hanes
SOURCE: National Post
NOTE: Kuitenbrouwer, Page A10
WORD COUNT: 698

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Miller budget hides 'true' tax hike, say councillors; $8.7-Billion Plan

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A 4% residential property tax increase that Mayor David Miller said will cost the average Toronto household just 25¢ more a day does not even begin to reflect the true hit homeowners will take under the city's 2009 operating budget, a group of councillors charged yesterday.

A half-dozen fiscally conservative critics of the Mayor argued that user fees and other new costs mean Torontonians are actually in for a 10% hike worth an extra $395 this year -- more than quadruple the $89 that Mr. Miller said the budget will cost owners of the average city residence.

"We think the budget committee should be telling the truth," said Councillor Denzil Minnan-Wong (Don Valley East) as the group unfurled a banner with "10%" scrawled in red. "If we're going to be having a debate about the budget and tax increases, we should be talking about at least 10% -- and that's a conservative number."

Mr. Miller yesterday unveiled an $8.7-billion "recession" budget for 2009, up from last year's $8.2-billion operating budget.

The city is relying on a 4% residential property tax hike; smaller commercial property tax hikes; $102-million in efficiencies; and $43-million from reserves to patch a$697-million hole and balance the books.

Presented under the theme "Toronto Helps," the budget focuses on preserving services and protecting the vulnerable.

It includes $33-million to fund a welfare caseload that is expected to average 90,000 recipients a month over the year. The load now sits at 81,000, up from 76,000 last year, but is expected to soar to 100,000 recipients by the end of 2009.

The city will also spend $23-million on programs and services aimed at helping the least fortunate, including $1.3-million worth of new and enhanced programs like a topped-up rent bank, emergency loans to cover rent deposits and an expanded property tax deferral or cancellation program exclusively for seniors and the disabled.

"The average family tax bill will increase by less than 25¢ a day to ensure help is there when everyone needs it the most," Mr. Miller said. "With a modest property tax increase, we each pay what we can to ensure that no one -- your neighbour, your co-worker, your friends, even your family --gets left behind."

New property taxes will generate an extra $83-million for the city --$57-million from the residential side and $26-million from business.

In the last recession, property

SOURCE: CITY OF TORONTO

taxes surged 13% to cover the growing welfare caseload, said the Mayor, while TTC service was cut and fares shot up.

This budget proposes to freeze Toronto Transit Commission fares at $2.75, along with the controversial land-transfer, vehicle registration and garbage collection taxes, but other fees for city services will increase 3.7% across the board.

"The proposed budget also includes an inflationary increase to most user fees, providing an additional $6.6-million in revenue out of over $396-million in user fees collected each year to offset the cost of programs," Mr. Miller said.

But Councillor Karen Stintz (Eglinton Lawrence) said the city is digging much deeper into Torontonians' pockets.

"The water rate increase of 9% is approximately $47 on the average home. The car tax, assuming 1.5 cars, is $90. The garbage tax if you assume the medium bin is $133. The pet tax, if you happen to have a cat or a dog, is $25," she said. "The impact of the commercial tax shift ... this year is $11 on an average house. And the property tax increase, that they tout at 4%, is about $89. And if you add that all up, it's $395, which is well above any municipality in the Greater Toronto Area."

JONATHON RIVAIT / NATIONAL POST

---------

BY THE NUMBERS

$102M Amount of budget savings the city found through "efficiencies."

$70M Amount of that "efficiency" the city found by simply not filling some vacant positions.

$150M The amount a blue ribbon panel reported last year the city could save if it looked for efficiencies.

$679M The size of a budget shortfall the city was facing before it found ways to fill the hole.

$43M The amount taken from reserves to help bridget the gap.

$0 The amount the city now has left in its reserves for welfare.

22,000 The additional number of seniors and disabled people eligible for property tax relief under expanded deferral and cancellation programs.

? The hidden amount socked away under non-program expenditures for a wage increase offer to indoor and outdoor city workers but not revealed yesterday to avoid negotiating in public."

$83M The amount in extra property tax revenue the city will take in from residential and commercial hikes.

$6.6M The amount of extra user fees the city will collect for a range of services.

$160M The amount the city is expecting to take in from the land transfer tax this year, which is down 25% from original projections of $240 million.

$46M The amount the city is expecting to collect from the vehicle registration tax this year.

 

[Archivist]

The Post? Whatever. Frankly, it's likely to disappear before the end of the end of the year anyways, because of the prudent private sector running it, a development I welcome.

I know my sister and brother-in-law in Calgary complain bitterly about their taxes. They know their taxes are low but what makes up for it are user fees for everything, that are extremely high. For instance, you need to pay to have a library card in Calgary.

Personally, I find that disgusting.

Lordmandeep, can you provide some backup to your comments? Right now you're just ranting. Show us that all the increase is in salary dollars - I don't believe you. Most of the big increases in salary dollars occurred in the years shortly after amalgamation, under the moronic Lastman, and were predictable enough given that if a person doing Job A in York was making $40K a year, and the person doing Job A in Etobicoke was making $44K a year, what do you think is going to happen as those salaries are made consistent across what is now a single organization? They're all going to go to the highest level. You can thank Mike Harris for that.

 

[Glen]

The City of Toronto has experienced approximately 2% inflation annually since 2003. So in total, we've had about 12% increase in costs.

That would account for inflationary increases not budgetary ones. Spending in Toronto between 2003 and 2008 is 31% higher.

 

[lordmandeep]

Lordmandeep, can you provide some backup to your comments? Right now you're just ranting. Show us that all the increase is in salary dollars - I don't believe you. Most of the big increases in salary dollars occurred in the years shortly after amalgamation, under the moronic Lastman, and were predictable enough given that if a person doing Job A in York was making $40K a year, and the person doing Job A in Etobicoke was making $44K a year, what do you think is going to happen as those salaries are made consistent across what is now a single organization? They're all going to go to the highest level. You can thank Mike Harris for that.

Ask yourself, is the extra 1.5B-2B being spent every year in the city that was not being spent 6 years really fixing and changing this city???

Is it honestly all going to fix infrastructure and for social programs???

Your point about the increase in wages due to amalgamation is true but that was before Miller's time.

Miller allowed for very generous increases in wages that were clearly not sustainable unless taxes were increased greatly. You must remember when those new contracts were signed the city was still in a terrible fiscal situation. The mayor said, we will just greatly increase taxes and user fees and not giving a damn about the future.

Now these increases in taxes are not all going to improve infrastructure but are going mostly to fund spending that is not needed and unsustainable wage increases.

The reason why there is such a uproar is because it is undeniable that this money is being misspent. If things were more efficient and better run, I do no think people would be so angry. Sure the no tax conservatives would still be pissed. However now even moderates like me are crying foul...