Vote Toronto 2010

Scarborough Town HallMarch 5, 2010

Campaign’s Goals:• Frame the key areas of debate that the election will be

fought on• Engage members in the formulation of ideas and policy

recommendations• To mobilize members and the broader Toronto-public in

a campaign to convince candidates to adopt Board recommendations into their own platforms

Four Themes:• Fixing our City Finances• Growing the Regional Economy• Strengthening our Social Cohesion• Improving Civic Democracy

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The Growing Chasm: Toronto’s Budget Shortfall

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2002 2003 2004 2005 2006 2007 2008 2009

Unsustainable $72 $173 $208 $347 $393 $388 $264 $447

Sustainable $97 $115 $136 $135 $139 $174 $351 $232

$0

$100

$200

$300

$400

$500

$600

$700

$ Millions

City of Toronto Unsustainable Funding

Sources for Net Operating Expenditures

2010 City of Toronto Operating Budget Highlights

• Total proposed budget $9.2-billion:- Represents a 5.7% ($500M) increase in gross spending over

2009- Base budget increase ($388M) + 2009 structural deficit

($451M)= TOTAL BUDGT PRESSURE of $821M

• Budget Gap closed by a combination of:- $388M sustainable budget strategies (user fees, TTC fare

increases, MLTT, PVT, Provincial uploads etc.)- $87M Property Taxes/$33M Assessment Growth- $313M unsustainable strategies (strike dividend; reserves;

$219M surplus)

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Running to Stand Still

• Historic Problem (2002 – 2008) was caused by a mismatch in revenues and expenditures):

- Property taxes increased at an average of 2.9%- Expenditures increased at an average of 5.9%

• 2010 Budget continues similar mismatch:- Property taxes increase 3.5%- Expenditures increase 5.7%

• City notes that 3 major services are driving cost increases:- Ontario Works: $155M- Housing: $130M- TTC: 80M

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The Growing Chasm: Forecast assumptions• All net tax-supported program costs increase at an average annual rate of 5%. Revenues from

non-tax sources (eg: grants and user fees) increase at the same rate as gross costs.

• All unsustainable revenues used to balance the 2009 budget are not available as revenue in 2010 and beyond.

• Estimated benefits from uploading Ontario Works and Police Court Security costs are incorporated.

• Debt servicing costs and current funding for capital projects are included as per the 2010-2019 Capital Budget.

• The model credits additional revenue from the 2010 TTC fare increase as $50 million in 2010. This revenue is held constant until 2012. A 15% increase (yielding $57.5 m per year) is assumed each year from 2013 to 2015, and a further 15% increase (to $62.2m per year) from 2016 to 2019.

• Assessment growth is assumed at 1% per year

• Total tax revenue is assumed to increase by 3% per year.

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The Growing Chasm: Toronto budget forecast

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Understanding property taxes: GTA Business Property Taxes

Municipality Commercial (%) Industrial (%) Residential (%)

Toronto 2.04 2.15 0.60

Pickering 1.65 2.57 1.14

Brampton 1.27 1.44 0.98

Burlington 1.20 1.94 0.82

Mississauga 1.08 1.20 0.77

Vaughan 0.92 1.05 0.76

Markham 0.91 1.04 0.76

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Understanding Property Taxes

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18%2%

72%

8%

City of Toronto Assessment Base in 2009

Commercial

Industrial

Residential

Multi-Res.

Understanding Property Taxes

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36%

4%

43%

17%

City of Toronto Tax Levy in 2009

Commercial

Industrial

Residential

Multi-Res.

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Solutions: Emerging Principles

• Solutions must be multi-year• Emphasis on expenditure reductions• Focus on major expenditure savings• Labour (representing 47% of total budget) must be a key focus

- Need to examine new labour model- Potential conflict with unions

• Structural (transformational) changes not available in the short term• Business property taxes cannot be a source of new revenues• Monetization of assets not desirable for operating budget • Provincial legislation review needed (eg. Arbitration Act, Police

Services Act)• TTC and Police Audit must be a priority• Budget processes must be more transparent

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