Mayor John Tory stands firm on low taxes in the face of massive budget shortfall, declining city services, and growing homelessness
The mayor has been taking heat for a plan to fund the operating budget with new tax levy revenue, and some councillors want him to keep the tax increase even lower.
The city is a year away from a $1.1 billion deficit for the current fiscal year — money that will have to be made up by dipping into reserves and relying on property tax revenue that has been low for some time.
The city’s operating budget for next year is expected to be $17.9 million. Tory’s predecessor, Mike Parker, used a portion of the revenue for capital projects, the largest of which is construction of the $1-billion Spadina subway extension.
This year, the city has already faced a shortfall of $5 million in operating reserves for the operating budget, and the operating reserves will be reduced to $3.6 million this fall and $2.2 million next year.
But in the wake of the announcement that the city has found a $1.9-billion surplus, Tory decided to hold the line on the tax increase, although he said it will only apply to real estate developers.
The city has already budgeted $10 million for property tax increases and revenue sharing in 2020 and $11 million in 2021 and 2022.
“This is the first time we’ve ever moved forward with a property tax increase to build our city,” Tory told reporters after the meeting.
“But I think it’s a reasonable one, based on the experience we had under Mike Parker at the start of the term, and I think we can keep the property tax increase manageable, while at the same time making responsible investments in the capital plan.”
Councillor Josh Matlow, who represents Ward 21, where most of the new development is taking place, said his committee will support Tory’s decision to reduce the tax hike, but only if other taxes are reduced.
He said he was worried about how developers would use the extra revenue raised by the tax hikes, and how the money would be collected
