Here's a nice little New Year's gift for the City of Toronto: the 2011 budgetary surplus is now expected to come in at $154 million, up from the $139 million projected when the first draft of the 2012 budget was released last month. A staff report on the surplus (one of four released over the course of the year to track operating variances), makes two primary suggestions for the use of the extra funds: that 75 per cent (or more) go to a capital financing reserve and that what's left go "to fund any underfunded liabilities and/or reserve funds as determined by the Deputy City Manager and Chief Financial Officer."

So the big question is whether or not these new projections will result in significant pressure to cancel some of the service cuts outlined in the 2012 budgetary draft. Given Ford's pledge to keep property taxes in check and to cut the putative gravy in general, it seems unlikely that an increased surplus will move the mayor to alter strategies. And yet, one would think that this news will make at least somewhat more difficult to "sell" the notion that Toronto has a crumbling fiscal foundation that can only be dealt with by eliminating staff and services. At a very minimum, the increased surplus should make the final budgetary meetings very interesting.

Photo by ~EvidencE~ in the blogTO Flickr pool