Toronto's budget is balanced, and the city can thank the housing market
Municipal Land Transfer Tax proceeds account for huge part of the city's revenues
Money is tight, but Toronto's budget chief says the city is close to passing a budget he considers fair and affordable.
The only problem is what happens next year.
The city has balanced 2017's books — something it's required to do — by relying on huge proceeds from the Municipal Land Transfer Tax (MLTT) and borrowing from reserve funds instead of increasing property taxes, which are set to remain at 2 per cent.
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The city's chief financial officer warned that it's getting harder and harder to balance the budget, and that there are already some $370 million in budget pressures for 2018.
"As your CFO, I'm getting a little worried about it," Rob Rossini told the city's executive committee yesterday.
Budget Chief Gary Crawford told CBC Radio's Metro Morning he shares some of Rossini's concerns, especially how much the city is leaning on proceeds from the MLTT — which brought in $184 million more in 2016 than it did in the previous year, but could make less if the city's property market cools.
The following chart, included in this year's budget presentation, shows just how fast the MLTT is growing compared to other revenue streams.
"We should not be relying as much on the MLTT as we are," Crawford said.
"If that wasn't there, our property tax would likely be higher than other municipalities," he said, noting Toronto has been given special power to collect the fee.
This year's budget proposes some revenue generators, including a hotel and short-term accommodation tax, that Crawford said could generate some $125 million. Crawford also said the city would use "modernization tools" in an effort to find more efficiencies in next year's budget.
He also defended the draw from reserve funds as something that's been done under mayors from Mel Lastman to David Miller. That draw will move $88 million in budget pressures to 2018.
Mayor calls for more provincial, federal money
Mayor John Tory called the budget process a "Herculean effort" at the executive committee meeting and called on the provincial and federal governments to do more to support Toronto's child-care, transit and affordable housing needs.
If that money doesn't come through, City Manager Peter Wallace said Toronto will have to lower or alter its spending, or look for more revenue tools.
Wallace also urged Tory not to "give up the ghost" on road tolls for the Gardiner Expressway and Don Valley Parkway, calling Premier Kathleen Wynne's decision to block them "truly unfortunate."
Several councillors continued to criticize the budget, saying its proposed cuts and service fee increases will hurt those who rely on city services. Even those who support this year's budget noted 2017's decisions will make for another difficult budget process next year.
Crawford, however, said the budget maintains the services people expect from the city.
"We're trying to do what is fair and what is balanced," he said.
City council is set to debate the budget from Feb. 15-16.
With files from Metro Morning