"Recession Budget" Calls For Tax Increase
At a press conference this morning, Mayor David Miller unveiled his $8.7 billion 2009 budget, which is set to go before city council at its meeting on March 31 and April 1. The most controversial aspect of the budget is a 4% residential property tax increase. The city's take from property taxes will only increase by 2.5%, since business property tax rates are being increased by only 2%, as part of the Mayor's broader plan to keep business tax rates down.
The Mayor listed higher costs for policing, snow removal, transit, and welfare as the principal factors forcing the tax increase. The "recession budget," as Miller dubbed it, increases spending on welfare by $30 million, budgeting for an average 90,000 recipients per month. There are approximately 80,000 current recipients, with a projected 100,000 at year's end. Plans to cancel or defer tax increases for low-income earners and seniors are being expanded, with another 22,000 families able to qualify.
In his opening remarks [pdf], Miller said he was elected to "preserve municipal services, protect the most vulnerable, and build a 21st century city." He argued that the only way to avoid a tax increase would be to cut close to an additional $100 million from the budget. "The result would be a city in decline, unable to compete when it is most important that we do."
Prior to the unveiling, Councillor Denzil Minnan-Wong (Don Valley East) criticized what was then the expected tax increase, arguing that along with increased user fees and other expenses, the average homeowner will actually be paying 10 per cent more in taxes this year. "That's part of the fiction of a 4% tax increase, it's more like a 10% tax increase. You take the 9% water increase, the garbage tax, the motor vehicle registration tax -- and that doesn't even take into account the land transfer tax." Mayor Miller specified in his press conference that there would be no increase in the land transfer tax.
Councillor Karen Stintz (Eglinton Lawrence) also took issue with the budget: "since I've been a councillor, the budget has grown by $1.7-billion and the residents in the city cannot point to a material improvement in their life for that money. If they were able to, we might be able to justify all these increases."
So what do you think? Is the Mayor right in saying that the tax increase is necessary in the face of increased costs? Should business property tax rates be increased by the same percentage as residential rates? Is Councillor Stintz right, or can you point to material improvements in your life resulting from increased city budgets? If you'd like more information, watch Mayor Miller's press conference, or have a look at the budget for yourself.
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