unimaginative2
Senior Member
905 faces big tax hikes
Apr 23, 2007 04:30 AM
Phinjo Gombu
Staff Reporter
Toronto may be near bankruptcy, yet the property tax increase councillors will vote on today is a modest 3.8 per cent.
If you want to see real pain, look to the suburban municipalities, where taxes have been going up steadily for the past five years – sometimes dramatically.
In Pickering, they're rising 8.7 per cent this year, triple the inflation rate. In Newmarket, it's 6.5 per cent. In Brampton, 6.6 per cent. And in Vaughan, there's a proposal for a 6.2 per cent increase that has yet to be voted on. Like Toronto, the smaller cities aren't happy with the legacy of provincial downloading, where Ontario governments arbitrarily transferred to municipalities responsibility for such things as certain social services – along with the millions of dollars in associated costs.
Local governments say it's unfair to make them boost property taxes to pay for provincial services.
Unlike Toronto, where the city has relied on provincial bailouts and borrowing from reserve funds to pay the bills while keeping tax increases down, suburban politicians haven't been afraid to give voters bad news. Across the GTA, downloading and its accompanying problems has meant large property-tax boosts in recent years, after almost a decade of zero or tiny increases.
Mississauga Councillor Carolyn Parrish, who chairs a Peel Region committee looking at problems associated with downloading, says that when it comes to raising taxes, Toronto politicians simply lack the guts.
She is also unimpressed with Toronto's recent threat to take the province to court to seek $71 million – the equivalent of another 3.8 per cent tax hike – to pay for some social service costs.
"Toronto's recent discovery of this inequity" is not legitimate, said Parrish, because it's been a thorny issue for years in the rest of the GTA.
Criticism of Toronto aside, Parrish and other suburban officials say the situation is becoming untenable.
Property taxes will go through the roof unless, they say, Queen's Park does a dramatic U-turn and takes back responsibility for social and medical programs foisted on them by previous Conservative governments. On that, at least, they are on common ground with Toronto.
Adding to the problem, however, is the fact that many suburban municipalities are aging, with roads, community centres and old-age homes hitting the end of their normal 35-year lifespan.
"In my view, infrastructure is the most significant challenge and it will continue to increase in terms of significance over the next number of years," says Rob MacIsaac, chair of the Greater Toronto Transportation Authority and former mayor of Burlington.
MacIsaac describes a "double whammy" – the flattening of income from assessments in recent years in many municipalities combined with the looming infrastructure crunch. He also says that, from a public policy point of view, downloading is particularly problematic if the economy takes a turn for the worse and even more pressure is put on the property tax base, which could prove disastrous.
"Municipalities for years have been under-investing in their infrastructure, and that has resulted in a massive bill that is accumulating. And as cities get older, those costs become more and more difficult to ignore."
Ajax Mayor Steve Parish explains the problem. "The typical taxpayer sees their taxes going up and up and up and says, `You guys are spending money like drunken sailors.' The reality is that we have to increase our taxes because the (city's) growth isn't paying for itself."
The argument goes that because municipalities are required to pay for social services from property taxes, and development charges aren't fully paying for the cost of new growth, fewer dollars are available to build items such as community centres and roads, or even to maintain them.
It has led to what the Association of Municipalities of Ontario calls the "$3 billion provincial-municipal gap," which it says "makes it impossible" for municipalities to invest adequately in the nuts and bolts of communities.
"That's property tax money that's not going towards municipal services," says an AMO official.
Peel is a case in point. The region anchored by Mississauga saw no tax hikes between 1990 and 2001. It has increased spending on infrastructure by 191 per cent, to $1.9 billion, over the past five years, compared to $650 million during the preceding five years. And the bills keep rising.
For example, says Peel treasurer Dan Labrecque, almost all the public housing units the province dumped on cities are "at the end of their life cycle."
"Our housing budgets are going to increase by 30 to 40 per cent in the next decade."
Labrecque says the region's net operating budget (the portion funded by property tax) is about $70 million.
"We need to grow that by at least $30 million just to cover maintenance needs," he says. "That's 40 per cent plus inflation on the whole package, however we slice it. It (has) a major impact."
One big sore point for the suburban regions – the past practice of "pooling" hundreds of millions of dollars to help pay for social services in Toronto – has been eased thanks to a provincial decision to chip in on those costs.
But other problems persist.
One major frustration for suburban cities is a restriction on the use of development charges – not much of an issue for a fully built city like Toronto.
Another initiative of the Mike Harris government, the restriction allows growing cities, or lower tier municipalities such as Mississauga, Brampton, Vaughan, Markham and Oshawa, to use only 90 per cent of fees paid by developers to fund such services as new parks, community centres and libraries. The remainder, Harris said, had to be made up with property taxes, meaning that the cost of growth was no longer fully covered by levies on developers.
Regional governments, such as Peel, Durham and York, also have issues with the rules surrounding development charges because they can't use the charges to pay for waste management, again putting pressure on the property tax base.
All these issues are the subject of intense negotiations between the Association of Municipalities of Ontario and the provincial government.
So where's the tax revolt?
For the most part, taxpayers continue to re-elect their high-tax mayors and councillors.
David Lewis Stein, who teaches a course on municipal issues at Innis College at the University of Toronto, said he's sympathetic to the plight of the "edge cities" because they've been more realistic about the "real cost of running" a city.
Not so with Toronto, argues Stein.
Former mayor Mel Lastman froze taxes for years and Miller pledged to hold his hikes down to the level of inflation.
"If you look back historically, they (the suburban municipalities) were steadily increasing their taxes to meet their needs and to meet the costs of downloading, while Toronto had a three-year hiatus where they simply froze taxes under Mel Lastman," said Stein.
"This was unrealistic."
Apr 23, 2007 04:30 AM
Phinjo Gombu
Staff Reporter
Toronto may be near bankruptcy, yet the property tax increase councillors will vote on today is a modest 3.8 per cent.
If you want to see real pain, look to the suburban municipalities, where taxes have been going up steadily for the past five years – sometimes dramatically.
In Pickering, they're rising 8.7 per cent this year, triple the inflation rate. In Newmarket, it's 6.5 per cent. In Brampton, 6.6 per cent. And in Vaughan, there's a proposal for a 6.2 per cent increase that has yet to be voted on. Like Toronto, the smaller cities aren't happy with the legacy of provincial downloading, where Ontario governments arbitrarily transferred to municipalities responsibility for such things as certain social services – along with the millions of dollars in associated costs.
Local governments say it's unfair to make them boost property taxes to pay for provincial services.
Unlike Toronto, where the city has relied on provincial bailouts and borrowing from reserve funds to pay the bills while keeping tax increases down, suburban politicians haven't been afraid to give voters bad news. Across the GTA, downloading and its accompanying problems has meant large property-tax boosts in recent years, after almost a decade of zero or tiny increases.
Mississauga Councillor Carolyn Parrish, who chairs a Peel Region committee looking at problems associated with downloading, says that when it comes to raising taxes, Toronto politicians simply lack the guts.
She is also unimpressed with Toronto's recent threat to take the province to court to seek $71 million – the equivalent of another 3.8 per cent tax hike – to pay for some social service costs.
"Toronto's recent discovery of this inequity" is not legitimate, said Parrish, because it's been a thorny issue for years in the rest of the GTA.
Criticism of Toronto aside, Parrish and other suburban officials say the situation is becoming untenable.
Property taxes will go through the roof unless, they say, Queen's Park does a dramatic U-turn and takes back responsibility for social and medical programs foisted on them by previous Conservative governments. On that, at least, they are on common ground with Toronto.
Adding to the problem, however, is the fact that many suburban municipalities are aging, with roads, community centres and old-age homes hitting the end of their normal 35-year lifespan.
"In my view, infrastructure is the most significant challenge and it will continue to increase in terms of significance over the next number of years," says Rob MacIsaac, chair of the Greater Toronto Transportation Authority and former mayor of Burlington.
MacIsaac describes a "double whammy" – the flattening of income from assessments in recent years in many municipalities combined with the looming infrastructure crunch. He also says that, from a public policy point of view, downloading is particularly problematic if the economy takes a turn for the worse and even more pressure is put on the property tax base, which could prove disastrous.
"Municipalities for years have been under-investing in their infrastructure, and that has resulted in a massive bill that is accumulating. And as cities get older, those costs become more and more difficult to ignore."
Ajax Mayor Steve Parish explains the problem. "The typical taxpayer sees their taxes going up and up and up and says, `You guys are spending money like drunken sailors.' The reality is that we have to increase our taxes because the (city's) growth isn't paying for itself."
The argument goes that because municipalities are required to pay for social services from property taxes, and development charges aren't fully paying for the cost of new growth, fewer dollars are available to build items such as community centres and roads, or even to maintain them.
It has led to what the Association of Municipalities of Ontario calls the "$3 billion provincial-municipal gap," which it says "makes it impossible" for municipalities to invest adequately in the nuts and bolts of communities.
"That's property tax money that's not going towards municipal services," says an AMO official.
Peel is a case in point. The region anchored by Mississauga saw no tax hikes between 1990 and 2001. It has increased spending on infrastructure by 191 per cent, to $1.9 billion, over the past five years, compared to $650 million during the preceding five years. And the bills keep rising.
For example, says Peel treasurer Dan Labrecque, almost all the public housing units the province dumped on cities are "at the end of their life cycle."
"Our housing budgets are going to increase by 30 to 40 per cent in the next decade."
Labrecque says the region's net operating budget (the portion funded by property tax) is about $70 million.
"We need to grow that by at least $30 million just to cover maintenance needs," he says. "That's 40 per cent plus inflation on the whole package, however we slice it. It (has) a major impact."
One big sore point for the suburban regions – the past practice of "pooling" hundreds of millions of dollars to help pay for social services in Toronto – has been eased thanks to a provincial decision to chip in on those costs.
But other problems persist.
One major frustration for suburban cities is a restriction on the use of development charges – not much of an issue for a fully built city like Toronto.
Another initiative of the Mike Harris government, the restriction allows growing cities, or lower tier municipalities such as Mississauga, Brampton, Vaughan, Markham and Oshawa, to use only 90 per cent of fees paid by developers to fund such services as new parks, community centres and libraries. The remainder, Harris said, had to be made up with property taxes, meaning that the cost of growth was no longer fully covered by levies on developers.
Regional governments, such as Peel, Durham and York, also have issues with the rules surrounding development charges because they can't use the charges to pay for waste management, again putting pressure on the property tax base.
All these issues are the subject of intense negotiations between the Association of Municipalities of Ontario and the provincial government.
So where's the tax revolt?
For the most part, taxpayers continue to re-elect their high-tax mayors and councillors.
David Lewis Stein, who teaches a course on municipal issues at Innis College at the University of Toronto, said he's sympathetic to the plight of the "edge cities" because they've been more realistic about the "real cost of running" a city.
Not so with Toronto, argues Stein.
Former mayor Mel Lastman froze taxes for years and Miller pledged to hold his hikes down to the level of inflation.
"If you look back historically, they (the suburban municipalities) were steadily increasing their taxes to meet their needs and to meet the costs of downloading, while Toronto had a three-year hiatus where they simply froze taxes under Mel Lastman," said Stein.
"This was unrealistic."
