Countdown to Zero: Balancing Toronto's Budget

Countdown to Zero: Balancing Toronto’s 2012 Budget

November 17, 2011

Sheila BlockDirector of Economic Analysis, Wellesley Institute

November 17, 2011

2

Countdown to Zero: Two Questions

• Is the City in a financial crisis?

• Are cutbacks to services and asset sales necessary to balance the budget?

April 13, 2023 | www.wellesleyinstitute.com

3

Opening budgetary pressures: 2007- 2012


2007 2008 2009 2010 2011 20120

100

200

300

400

500

600

700

800

900

562615

679

821

706774

($ M

illio

ns)

4

What is and isn’t different this year?

Different• Unlikely federal, provincial governments will step in• Property tax rate freeze + cancellation of the Personal

Vehicle Tax = $132 million in lost revenue

Not different• City is obligated by law to balance its operating budget• Budget process is about eliminating the “operating

shortfall” - gap between next year’s expenditures and this year’s revenues


5

What are the Mayor’s solutions to address the shortfall?

Service review program• Core services review results:

o90% of City services are “core” o8% of City services are “traditional”

10% across the board cuts

Other solutions?


6

How have we handled the budget shortfall before?


*Figures are 2007-2011 Average

181

135

98

134

37

91

Prior year surplus

Funding from other levels of government

Cost cutting measures

Increased municipal revenues

Reserve

Property taxes

($ Millions)

7

How can we get Toronto’s budget shortfall to zero?


0

100

200

300

400

500

600

700

800

900

Opening operating shortfall

Adjustment to salary and benefit cost increases

Prior year surplus

TTC fare increase

Tax stabilization fund

2 Year normal property tax increase

Assessment growth

Municipal Land Transfer Tax growth

Other revenues

Cost reductions

Remaining Shortfall

($ M

illio

ns)

Measures that bring the $774 million shortfall down to zero:

774

41

-100

-181-30

-88

-136-30

-25-46

-98

8

Conclusions• Councillors have choices• Scale and scope of this year’s shortfall is no

different than other years• No need for drastic cuts to balance this year’s

budget


Economy & Finance

Countdown to Zero: Balancing Toronto's Budget