It’s taxes or cuts, Toronto mayor warns
Jeff Gray – The Globe and Mail
As city bureaucrats struggled to come up with $100-million in budget cuts, Mayor David Miller warned yesterday that if his proposed new taxes do not pass when they reappear before council in October, even more bloodletting will be necessary.
“In the end, if the new tax revenues don’t pass in the fall, there will be extremely significant cuts, and probably extremely significant tax hikes,” he told reporters.
His comments came as city manager Shirley Hoy and the management team struggled to find cuts to make up for the lost revenue they say will result from the deferral last month of Mr. Miller’s two proposed taxes: an up to 2% tax on land sales and a $60 fee on vehicle registrations.
An announcement on the cuts was tentatively slated for some time today, but Mr. Miller said yesterday that the report may not be ready. Litter pickup, grass cutting in parks and recreation-centre hours are among the possible targets.
Ms. Hoy, chief financial officer Joe Pennachetti and others were crunching numbers for most of yesterday, consulting with the mayor and budget chief Shelley Carroll.
Of the $100-million, meant to cushion next year’s anticipated budget crisis, the Toronto Transit Commission was asked to find $30-million, as were the city’s emergency services (police, fire and ambulance).
The TTC moved to defer $4-million in planned new service to deal with overcrowding, but pushed debate on more drastic moves, such as fare increases or closing the Sheppard subway, to next month.
The police board, asked to find $10-million, originally put off making cuts, although it is to meet today. Cuts to libraries have already been announced.
Last month, city council deferred further consideration of the two taxes until after the October provincial election in a 23-22 vote that followed vigorous lobbying by the real estate industry.
The taxes on land transfers and vehicle registrations would have brought in an estimated $350-million a year. Staffers say the delay caused by the deferral means the taxes, even if approved, would not be up and running until March instead of January, costing the city more than $90-million.
After years of tapping reserve funds to balance its budget – by law the city cannot run an operating deficit – the city faces a projected $575-million shortfall next year.
At the root of its problems, almost everyone on council agrees, is the pressure of having to fund services formerly covered by the province, but “offloaded” by the Progressive Conservative government of the day in the 1990s. A provincial panel on the offloading problem is due to report back in February.
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