Monday, October 22, 2007

More taxes please

City of Toronto City Council is well known for their making sure the cost of city projects is the least important factor when handling bids for city contracts. Untendered contracts and fair wage rules help the city differ from the normal processes followed in the private sector. Councillors make sure they are rewarded for their job and will not sacrifice any perks when times are tough. This attitude combined with downloading costs of Provincial programing to cities has left Toronto in a financial crisis. Reserve accounts have been raided. At one point in desperation all of the hydro poles were sold to the province for extra funds. The reserve funds are now almost empty and drastic action has to be taken.

Last year David Miller won reelection while campaigning on a platform that included keeping property tax increases to 3%. The Province had so generously passed the City of Toronto Act which gave new taxing powers to the city. While not discussed during the election campaign his plan was to use these new powers to balance the budget.

Early this summer two new taxes were introduced. There was a 1% land transfer tax on property sales to be added on to the 1% already charged by the Province. There would be a $60 annual vehicle registration fee to be added on to the $74 already charged by the Province. There was a huge backlash from residents. While planning the budget councillors failed to give up a single one of their many perks. Council decided to push off the issue until after the provincial election to put pressure on the provincial parties.

Mayor Miller responded by claiming immediate cost cutting measures needed to be introduced. The measures introduced seemed to be designed to hurt as many people as possible than to provide real savings. There was talk about shutting down the Sheppard Subway line to save $5 million dollars. This seemed particularly petty considering the TTC wants $2.6 Billion for LRT all over the city. They also have secured funding to extend the subway to York University and other infrastructure projects. The TTC settled for a fare hike to avoid budget cuts which seemed to be the poison of choice for riders.

The city closed community centres on Mondays. The buildings were still operating with all full time employees reporting to work. The only cost savings was from part time workers laid off. The savings were offset by loss in revenue from denying the public access to programs they normally pay for. Some libraries were closed on Sundays. The union just won a grievance that their staff still have to be paid eliminating the savings from that scheme. Outdoor rinks were going to be delayed opening until January. This included the Nathan Phillip Square a popular tourist attraction during the holiday season. Master Card came up with a $130,000 donation to keep the rinks open.

During the provincial election the financial crunch faced by the city was virtually ignored. Miller expressed support for all 3 parties, although he seemed to express a little more support for the Liberals. When McGuinty was reelected Miller said that it was a green light for his taxes to go through. Citizens are willing to pay more to have services they want. McGuinty raised taxes after he promised not to and was reelected. This ignored the fact that McGuinty promised not to raise taxes this time and the major campaign issue was faith based school funding.

Miller has seemed to have learned from his embarrassing summer. Last week he introduced a panel of elite citizens who have experience running multi million dollar organizations. They are to examine the cities books and provide a report before work starts on next year's budget. It appears he has listened to people concerns and has made amendments to the taxes to make them a little more fair. We will find out tomorrow what they are. He has hinted there may be an exemption on the land transfer tax for first time home buyers.

Tomorrow, the taxes should be approved by council. Hopefully the mayor has learned his lessons and we can expect better leadership in the future. Hopefully next year's budget will include measures with councillor willing to make sacrifices for the greater good as they once again ask residents to do the same. I have my doubts. We will have to wait and see.

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