{"id":47568,"date":"2014-01-28T08:30:59","date_gmt":"2014-01-28T13:30:59","guid":{"rendered":"http:\/\/spacing.ca\/toronto\/?p=47568"},"modified":"2014-01-28T11:01:35","modified_gmt":"2014-01-28T16:01:35","slug":"lorinc-fords-land-tranfer-tax-fantasy","status":"publish","type":"post","link":"https:\/\/spacing.ca\/toronto\/2014\/01\/28\/lorinc-fords-land-tranfer-tax-fantasy\/","title":{"rendered":"LORINC: Ford’s land transfer tax fantasy"},"content":{"rendered":"

\"feature-lorinc\"<\/a><\/p>\n

Mayor Rob Ford showed up to his budget show-down presser yesterday wearing a Denver Bronco\u2019s jersey, and I suppose the logic isn\u2019t hard to fathom. The Broncos are considered the odds-on favorites<\/a> to win next Sunday\u2019s Superbowl.<\/p>\n

Which means\u2026.<\/p>\n

1.<\/strong> Ford is now a Bronco fan.
\n2.<\/strong> He\u2019s got a \u201csimple,\u201d but so far undisclosed, budget plan to slash $50 million from the operating budget during this week\u2019s council meeting.
\n3.<\/strong> Ergo (my word, not his) he will win at council, or something like that.<\/p>\n

Of course, his plan won\u2019t win. Ford hasn\u2019t been on the winning side of anything in a dog\u2019s age, and this week\u2019s numbers fest won\u2019t break that losing streak, even if there is an election set for the fall.<\/p>\n

Indeed, one of the more perplexing ironies about Ford, a man obsessed with sports, is that he wouldn\u2019t know a winning political tactic if Bronco QB Peyton Manning delivered it to him in person. What\u2019s more, Ford\u2019s play of choice is the intentional spike.<\/a> He\u2019s a kind of cartoon character who will catch the ball and then run it all the way into his own end zone so he can make a big point of losing.<\/p>\n

But as with all attention-craving children, we\u2019re going to spend many an hour tomorrow and Wednesday watching him repeat lies and assorted errant nonsense<\/a> during the rhetorical pummeling that will follow the tabling of his motions.<\/p>\n

A much more interesting sideshow will involve the fate of several confusing motions from the executive committee that boost the 2014 revenue projections from the municipal land transfer tax (MLTT) by $8 million, both to cover other spending and to mitigate a politically inconvenient 2014 property tax increase.<\/p>\n

The MLTT \u2013 which now accounts for almost a tenth of the city\u2019s net budget \u2014 continues to be something of a curiosity in the never-ending drama over the City\u2019s finances. It was one of the two alternative revenue sources approved during Mayor David Miller\u2019s second term. The tax exists because Miller and the provincial Liberals negotiated reforms meant to provide the City of Toronto with more financial latitude and authority over its own affairs.<\/p>\n

Miller\u2019s council was reluctant to take up the new taxing power the City had acquired. It took two tries before they finally settled on the MLTT and the vehicle registration tax. Ford, of course, successfully picked off the latter, and has vowed to rescind or reduce the former for much of his mayoralty.<\/p>\n

The City\u2019s realtors regularly get up on their hind legs and bray about how the MLTT is the worst thing that\u2019s ever happened to Toronto homebuyers. They commission polls<\/a> that apparently demonstrate widespread negative sentiment. But councillors don\u2019t pay much attention, because in any given year, only a small proportion of their constituents find themselves in the home-buying category.<\/p>\n

In any event, is there anyone in this city dumb enough to believe the real estate industry\u2019s tales of woe? You know, the same group that feasts off obscene bidding wars, record-breaking development activity and so many sold-above-asking anecdotes that it\u2019s impolite to discuss the windfall in mixed company?<\/p>\n

Consequently, the MLTT has survived Ford\u2019s, um, ministrations, and has gone on to become a bone fide cash cow for the City. Just consider this fun fact: while Ford brags about slashing $750 million from the budget (and therefore from public services) during his term, Miller, by getting the MLTT approved, delivered a total of $1.6 billion in incremental revenue to the City since its inception in 2008. To date.<\/p>\n

Had the MLTT not existed, the Stintz\/Ford plan to impose a property tax hike to raise $1 billion for the Scarborough subway could have never flown; the proceeds from additional taxes would have gone towards the City\u2019s day-to-day needs.<\/p>\n

Last week\u2019s move by some on the executive committee to boost the projected income from the MLTT adds a new twist to this tale. Traditionally, when council hasn\u2019t been able to balance the books going into the budget approval meeting, it dips into various reserve funds to find the missing pieces. Now, apparently, they\u2019re looking to spend money that hasn\u2019t come over the city\u2019s transom yet.<\/p>\n

Ball in Ford\u2019s court? Not so fast. As this chart shows, the City\u2019s finance types have consistently low-balled \u2014 in some cases, quite dramatically \u2013 the expected take from the MLTT. The pattern, in fact, is very apparent: in the early days of the tax, City staff budgeted very cautiously, while the annual MLTT revenue grew at a blistering pace, especially in 2010 and 2011. (The chart, by the way, is bespoke \u2013 I had to ask for the historical breakdown.)<\/p>\n

\"lorinc-table-jan2014\"<\/a><\/p>\n

(Source: City of Toronto)<\/em><\/p>\n

In the past two years, the year-over-year growth of the MLTT appears to have tapered, and the budget estimates have come closer to matching the actuals. This year, the initial 2014 projection came in at $335 million, which is actually less than the 2013 figure, although staff subsequently revised that number up, but urged council not to go past $350 million.<\/p>\n

Has the MLTT crested? It\u2019s possible. But the city\u2019s real estate market, to which the MLTT is lashed, shows no signs of stalling. In fact, the Toronto Real Estate Board, the same outfit that annually bemoans the existence of the tax, predicted earlier this month<\/a> that the price growth from last year seems likely to continue through 2014. So is an $8 million, or 2.2%, boost in the projected take unrealistically optimistic and cavalier? Not really.<\/p>\n

The MLTT\u2019s expansion, of course, is not limitless, and councillors should not get hooked on this type of budget-making, much in the same way that they shouldn\u2019t depend on annual trips to the reserve funds to make the scales balance. But in a year when one lunatic does nothing but yell that the house is on fire, a slightly less diffident projection than usual won\u2019t bring the roof tumbling down.<\/p>\n

photo by George Kelly<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Mayor Rob Ford showed up to his budget show-down presser yesterday wearing a Denver Bronco\u2019s jersey, and I suppose the logic isn\u2019t hard to fathom. The Broncos are considered the odds-on favorites to win next Sunday\u2019s Superbowl. Which means\u2026. 1. Ford is now a Bronco fan. 2. He\u2019s got a \u201csimple,\u201d but so far undisclosed,Continue reading “LORINC: Ford’s land transfer tax fantasy”<\/span><\/a><\/p>\n","protected":false},"author":4051,"featured_media":47575,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ngg_post_thumbnail":0,"_ef_editorial_meta_paragraph_assignment":"","_ef_editorial_meta_date_first-draft-date":"","_ef_editorial_meta_checkbox_needs-photo":"","_ef_editorial_meta_number_word-count":"","footnotes":""},"categories":[2],"tags":[],"class_list":["post-47568","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"acf":[],"yoast_head":"\nLORINC: Ford's land transfer tax fantasy - Spacing Toronto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/spacing.ca\/toronto\/2014\/01\/28\/lorinc-fords-land-tranfer-tax-fantasy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"LORINC: Ford's land transfer tax fantasy - Spacing Toronto\" \/>\n<meta property=\"og:description\" content=\"Mayor Rob Ford showed up to his budget show-down presser yesterday wearing a Denver Bronco\u2019s jersey, and I suppose the logic isn\u2019t hard to fathom. 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