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Tuesday’s headlines

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• ‘Frustration bubbling’ as city faces 4% tax hike [ National Post ]
• Scarborough library site approved by councillors [ Toronto Star ]
• Progress slow in saving city money [ Toronto Star ]
• Town hall meeting to explore traffic calming measures in North
Leaside [ National Post ]
• Vaughan trash plant makes ‘green’ fuel [ National Post ]
• Welfare costs muddy Toronto’s economic forecast [ Globe & Mail ]
• City set to reveal hard-times budget [ Toronto Star ]
• Mississauga set to unveil lean budget [ Toronto Star ]
• TTC union president wants a challenger [ Toronto Star ]
• Mayor doles out $1.3M [ Toronto Sun ]

15 comments

  1. It’s a good thing Miller and his gang, civic workers included, have the jobs they do with him at the lead otherwise they might have to prove they are worth raises, increased hiring budgets, etc. despite the fact their performance has NOT improved over 4 years and counting.

  3. Toronto’s budgets bring out the worst in both sides (left and right) of council.

    On the one hand we have the Mayor and his allies steadfastly stating that we are getting good value for the money. Contrast this to reality where from 1998 to 2008 the city’s population grew by 10%. Inflation for the period was 22% and spending increased 46%. Yet residents feel the city is providing them with less or feel the don’t get good value for the money (see below).

    On the right side of council we have politicians claiming that taxes are so high that people well flee or be forced to move from the city.

    The reality is that Toronto’s residential taxes among the lowest in the province (the opposite is true for business property tax). At the same time its expenditures are the highest. Compare Toronto to Mississauga. For 2006 the city of Toronto’s operating budget worked out to spending $ 8,422 per household. In Mississauga (combined with Peel region) municipal spending was $3848.29 per household. So while the average residential property tax burden might differ by 25% between Mississauga and Toronto, that only shows half the picture.

    Toronto spends on average $ 8,422 per household while collecting an average of $ 2,174 in property taxes per household

    Mississauga and Peel Region combined spend $ 3,848 per household while collecting $ 2,800 in property taxes per household

    In Toronto, the property tax on an average home represents only 26% of the actual cost of services.
    In Mississauga, property tax on an average home represents 73% of per household cost of services.

    One side says we get good value.
    The other says residents pay to much.

    Neither is true.

  4. Nice statistics Glen.

    But consider this, every resident of Peel or Durham or York does not pay a dime to drive into via city owned routes of the City of Toronto.

    Nor do they pay a dime for our inflated welfare rolls.

    When the province takes responsibility for these expenses, perhaps the stats will be different,

  6. Glen,
    Value is in the eyes of the beholder. I agree with you that we are not getting good value for our money in this City — and one doesn’t have to be right-wing to consider many of the City’s projects as questionable. Factor in the many additonal fees that we are being hit with and the increase is well over 4%.

    But I would disagree with you that Toronto has among the lowest taxes in the GTA. Comparisons of value only make sense WITHIN a given municipality. Yes, TO may have a lower mill-rate BUT property values are generally much higher in TO. Generally, $300k buys you a lot less home in TO than it does elsewhere in the GTA. That means that when you consider homes of roughly the same type, space and lot size (which is comparing apples with apples), TO taxes are a lot higher than surrounding municipalities.

    Some of this has to do with Council’s questionable spending priorities. (And it’s not just right-wingers that don’t agree with some of this Council’s expenditures.) Some of it has to do with the fact that this Council insists on charging development fees that are much lower than in surrounding municipalities and also fall far short of the costs of the infrastructure needed to support new units (which means that existing rate payers have to make up the difference). And given the pace that we’ve been putting up new units, this difference amounts to a sizeable amount.

    But the bulk of our cost pressures have to do with the fact that (years after the Tories have been swept out of Queen’s Park), municipalities still are responsible for such things as welfare and social housing. Now, Toronto has a HUGE stock of social housing units. BUT, many of the municipalities in the GTA have, traditionally, not been too keen on social housing within their boundaries. What this means is that a disproportionate number of poor people locate in Toronto because that is where the most supports tend to be — all of which means an increasing strain on existing ratepayers.

    The Harris government created this mess but the McGuinty regime has perpetuated it — and it is not right.

  7. The contribution of the commercial sector and the large proportion of multiresidential means that a per household comparison is difficult to sustain between 416 and a 905 municipality full of little (er, huge) boxes made of tickytacky.

  9. samg,

    You make a good point that “Comparisons of value only make sense WITHIN a given municipality”. In fact that is what I was trying to do. I used the Mississauga information to illustrate that property tax is a poor proxy for determining municipal expenditures and determining a fair burden. It is not just what one pays but also what one gets that determines value. Toronto’s taxes should represent Toronto’s expenditures. Comparing assessments, lot sizes, mill rates, etc. is not all that useful. Or at least only as useful as comparing them to Madrid’s, let alone Mississauga’s. Using 2006 data from the Municipal Performance Measurement Program it shows that Toronto spent $8,422 per household in 2006. On the other hand Mississauga and the region of Peel combined, spent $3,848.29 per household.

    The question Torontonians should be pondering is how they can get so much for so little. The reality is that it has been achieved through having “the highest-taxed offices in the world” (Blake Hutchinson), raiding the reserves and by transfers from other levels of government. The other question Torontonians should be asking is how sustainable are these. With Vaughan looking to get a hospital of its own and having its citizens provincial income taxes paying for Toronto’s while being told by the province to pay for it themselves, the issue is going to become more heated. The 905 regions, which all have higher taxes, have reached the point where they will require funding equal to that of Toronto. In the meantime the other levels of government are not in a position to increase transfers. Lastly the levels of taxation of non-residential properties within Toronto itself have killed the golden goose ( http://www.theglobeandmail.com/servlet/story/LAC.20080425.FIRE25/TPStory/TPNational/Ontario/) . The city has less jobs today than twenty years ago.

    In so far as the “Harris Downloading” goes, again lets look at both sides of the ledger. In 2007 the cost of Provincially Mandated / Cost Shared Programs for Toronto was 729 million. While Toronto was not alone in the provincial downloading, lets compare this burden with the extra provincial funding that it gets. According to the United Way it amounts to over $1,054 per person in 2007 (2008 is even more but I don’t have the data handy). That more than offsets the the total cost of PM/CS programs. So while other municipalities may have less of a burden they also have far less offsetting provincial grants.

  10. Glen,
    With respect to municipalities lying side by side, the comparison of lot size and living space makes much more sense than property values.

    I agree with you that taxes for commercial properties are way out of line in TO — which is why incidentally we have been bleeding a lot of jobs.

    However, I think most Torontonians (not just the right wingers)would dispute that we are getting “so much”. You bring up the example of Vaughan which is instituting a property levy (I think that’s the technical term) to fund a hospital. Bottom line though is that the Vaughan and other municipalities in the GTA simply do not have the social service costs (welfare, social housing) that Toronto does. A much much higher proportion of Toronto’s costs goes to social services than does Vaughan’s.

    Toronto is a city that attracts a disproportionate amount of new immigrants — which means increased social service costs. (Once many new immigrants get somewhat established, many chose to move out to the surrounding municipalities.) Toronto is also a city that attracts the poor from surrounding municipalities and from farther afield. As for the social housing stock that the province bestowed on the City, I think the province knew damn well that much of this stock was in extreme disrepair and represented a huge liability for the “landlord”. Social service costs should go back to being a provincial responsibility.

    Bottom line is that most Torontonians are not asking why they are getting so much for so little (most would not consider social service expenditures as something they are “getting”). Most Torontonians are asking why they are getting so little for so much.

  11. samg,

    I will have to disagree with a few of your points. The percentage of the budget that is influenced by density, and therefore lot size, is small.

    I have had a look at the immigration issue and again find flaws in the argument that it has a large burden exclusively for Toronto. The 905 area attracts more immigrants to than Toronto. And yet we we see reports like “Poverty by Postal Code”, which offer the immigrant issue as an explanation. This is impossible to reconcile. If immigrant families are highly represented in the poverty figures, while Toronto’s share is decreasing, the trend should be the opposite. Conversely, if factors making immigrants more susceptible to poverty are innate, then we should see an increase in poverty in the 905 regions, as they are now the destination of the majority of immigrants. This did not happen. Immigrants in Toronto are have struggled while those in the 905 have prospered. This was not always the case. The only factor that changed during the time when the levels of poverty took different trajectories between the regions is Toronto’s move to CVA. It was not a radical change in immigrant demographics nor numbers that increased poverty. It appears to be simply a reduction in the availability and location of the type of work they could initially participate in.

    Insofar as Toronto being an attractor for the poor. Yes that is true. If the cost of that is the total of the 725 million downloaded by the province that amounts to ~$725 per household. This is more than offset provincial transfers of ~$2,200 per household.

  12. BTW samg,

    I always appreciate your comments here. Unlike the hit and run comments all to often seen, it is nice to flesh out issues.

  13. Guys consider this… why, if Toronto is the most expense real estate in the province, do we demand to house those without and those that can’t afford in the most expensive place to do so?

    Couldn’t we do more if we placed these folks elsewhere? YES!

    Couldn’t the city realize better value ie:taxes for the same properties, if they placed these people elsewhere? YES!

    And, could we then help more people as a result? YES!

    Toronto does NOT need to be the only place for subsidized housing, homeless housing, etc. unfortunately the social experiment by those in charge does not wish to act in a realistic or businesslike fashion.

    So, we have overpriced subsidized public housing in a location that is not the best value. We also have spendthrifts in charge and unwilling to act with fiscal responsibility because they might lose their voters and they might lose a perk.

    Those are the facts… no 25 cent spin included.

    Comparing elsewhere is just that and has no bearing other than to shift focus away from the problem HERE.

  14. Glen,
    The 905 does attract more immigrants — BUT this is typically once they become more established. During the initial phase, during the time when they need the most supports, they tend to settle in Toronto.