Toronto City Council held its final vote on the 2019 City budget on March 7. Despite the need for bold action, the final budget moves us forward at a snail's pace in addressing the serious challenges our city faces. Many motions aimed at responding to significant crises and improving life in our city failed to receive a majority of support. Get all the details in today's budget watch update.
Low Property Taxes Remain #1 Priority
Toronto City Council started out the meeting deciding the city's property tax rates. Toronto's property tax rates vary by type of property (e.g. residential, multi-residential, commercial, industrial). It has been the practice of Council for several years to set the property tax rates first, and then move on to the operating and capital budgets where decisions are made about which programs, services and infrastructure will be funded. This practice disconnects property taxes from the programs, services and infrastructure those taxes support. No other revenue source is treated this way.
At Thursday's meeting, Councillor Perks asked the Mayor to combine the property tax item with the operating and capital budget decisions so that all could be considered together. The Mayor declined his request.
In January, at the beginning of the budget process, the staff recommended budget called for a 2.55% residential property tax increase. All in, this is the equivalent of an additional $104 for the year (an extra $2 a week) for the average residential property owner with a home worth $665,605. (note: The total increase is 3.58%, including the 2.55% residential property tax increase, the impact of property value assessments which happen every four years, and the City Building Fund, a tax levy to support capital funding for transit and housing. These parts of the tax increase amount to an additional $104 for the average residential property owner.)
Council Votes Down All Motions to Increase Property Taxes Above Inflation - Even Motion to Add Just 6 Cents to Average Residential Property Tax Bill Fails
At Thursday's meeting, Councillors Perks, Layton, Matlow and Wong-Tam attempted to increase residential property taxes above the 2.55% increase proposed in the staff recommended budget. These Councillors indicated that the additional funds are needed for a variety of City services.
Their motions called for quite small increases. The largest increase proposed was 2% which would have added $58.62 for the year, or $1.13 per week, to the tax bill of the average residential property owner with a home worth $665,605. The smallest increase proposed was 0.002% which would have added 6 cents for the year to the tax bill of the average residential property owner.
All of these motions failed. The residential property tax increase was set at 2.55%, or an extra $2 per week for the average residential property owner.
Councillor Perks: Called for an additional 2% increase, the equivalent of an additional $58.62 for the year for the average residential property owner with a home worth $665,605, or an additional $1.13 per week. (If this motion had passed, the average residential property owner would have paid an additional $3.13 per week instead of the additional $2 per week passed by Council.)
Councillor Layton: Called for even smaller increases of 0.161% for services such as child care subsidies ($4.72 for the year for the average residential property owner), 0.022% for services such as ravine maintenance ($0.64 for the year), and 0.842% for actions such as the elimination of the transit fare increase ($24.68 for the year).
Councillor Matlow: Called for an additional 0.06% increase for services such as enhanced youth spaces, youth hubs, expansion of tenant hotline and outreach services, and a seniors homesharing program ($1.76 for the year).
Councillor Wong-Tam: Called for the smallest increases of 0.006% for services such as funding the Regent Park Aquatic Program Pilot ($0.18 for the year) and 0.002% for services such as homeless prevention initiatives ($0.06 for the year).
Toronto's Low Property Taxes Starve City of Resources
Ryerson University research shows, among 29 GTHA municipalities, Toronto has the second lowest average residential property tax as a percentage of average household income, the third lowest as a percentage of average value of dwelling, and sixth lowest in terms of average residential property tax paid.
The authors found that residential property taxes could be 20% higher and still be less than the average property taxes paid in half of the municipalities in the GTHA (i.e. less than the median). Remain calm - no one is suggesting a 20% increase in property taxes! The research simply tells us that City Council has a choice. It could raise revenues to pay for needed services with a modest property tax increase above inflation. It chooses not to do so. This is a policy choice that especially benefits the most affluent.
But wouldn't a larger increase run seniors out of their homes? No, the City has programs to help low-income seniors and people with disabilities who can't afford to pay the increase. If needed, City Council could beef up those programs to protect people who would struggle with an increase and still raise revenues for critical programs, services and infrastructure. A majority of Council chooses not to do so.
Operating and Capital Budgets: Key Motions
Motions that Passed
- Continue to fund the Homeshare Pilot Project by allocating $120,000 from the Community Partnership and Investment Program (CPIP). (moved by Councillor Thompson)
- Fund the Creating Health Plus program to provide nutritious food at 29 drop-ins at a cost of $55,000 gross and $14,000 net (cost shared program), drawing city funds from capital from current (i.e. revenues intended for capital budget). (moved by Councillor Cressy)
- Fund Toronto Food Policy Council to support food security work at a cost of $30,000 gross, $8,000 net, drawing from capital from current (i.e. revenues intended for capital budget). (moved by Councillor Cressy)
- Fund Regent Park Aquatic Pilot Program, with a friendly amendment to fund at $80,000 through a reduction of capital from current (original motion moved by Councillor Wong-Tam; amendment moved by Councillor Crawford)
- Implement the expansion of FOCUS and Crisis Response gun violence prevention programs at an estimated cost of $200,000 to be absorbed within the existing budget for the Social Development, Finance and Administration division. (moved by Councillor Cressy)
- Request staff report on options for increasing investment in deeply affordable housing, supportive housing and child care. (moved by Councillor Layton)
- Include in staff report on long-term financial plan short- & long-term options for revenue tools that might assist with unfunded program priorities, unfunded capital needs and emerging issues. (moved by Councillor Filion)
- In the review of winter maintenance, consider feasibility & service level implications of: providing comparable snow clearing service in Toronto & East York as in Etobicoke, North York, Scarborough & contracting in snow clearing. (moved by Councillor Wong-Tam)
- Monitor for safety and security in self-service open library hours. (moved by Councillor Fletcher)
- In Poverty Reduction Strategy 2.0 plan, consider the utility and feasibility of library open hours program, opportunities to partner with youth serving groups, and timeline for fair fare pass. (moved by Councillor Perruzza)
Motions that Failed
- Explore feasibility of implementing a personal vehicle tax at $60 per car per year to raise about $55 million a year; 50% funds go to transit, 50% to winter road maintenance, operations and safety. (moved by Councillor Layton)
- Reduce police budget by $3.35 million and allocate those funds to Toronto Public Library to extend hours. (moved by Councillor Perks)
- Reduce police budget by $250,000 and allocate those funds to Environment and Energy Division for full implementation of Transform TO, climate change plan. (moved by Councillor Perks)
- Increase Integrity Commissioner's budget by $190,000 by increasing the target for the Toronto Parking Authority dividend. (moved by Councillor Perks)
- Request for a staff report to look at the feasibility of providing all city staff with the cost of living increase and benefit enhancements that police got in their recent negotiations. (moved by Councillor Wong-Tam)
- Fund rent bank/homeless prevention work at Neighbourhood Information Post using $70,000 from the Social Housing Stabilization Reserve. (moved by Councillor Wong-Tam)
- Fund an additional 2.5 positions for the tenant hotline & outreach & organizing program by drawing $135,500 from a vehicle reserve account from solid waste management. (moved by Councillor Matlow)
- Fund 3 new youth hubs by drawing $390,000 from four vehicle reserve accounts. (moved by Councillor Matlow)
- Fund 5 enhanced youth spaces drawing $1.055 million from vehicle reserve accounts. (moved by Councillor Matlow)
- Fund increased staffing to extend library hours through a reduction of $428,000 of capital from current. (moved by Councillor Fletcher)
How Did Your City Councillor Vote?
We'll post the voting records of the Mayor and all 25 City Councillors on key budget votes shortly.