Countdown to Zero: Balancing Toronto’s Budget

http://www.wellesleyinstitute.com/blog/countdown-to-zero-balancing-torontos-budget/

 

The City of Toronto can bring its budgetary shortfall down to zero without gutting city services and selling off assets. Countdown to Zero: Balancing Toronto’s Budget by the Wellesley Institute’s Sheila Block, looks at the city’s annual budgeting process over the past five years and shows that the fiscal challenges facing city council this year are nothing new.

For the last five years the City of Toronto has started its budget process with a budgetary shortfall of over half a billion dollars and every year the city brings the shortfall down to zero, without gutting city services or selling off valuable assets. The report demonstrates, step-by-step, how the city can do the same thing this year.

Contrary to the rhetoric coming out of the mayor’s office, it isn’t too late; councillors can make budgetary decisions that build our city, rather than cutting services that Torontonians rely on.

While councillors have many options, the Wellesley starts the conversation by charting one possible way out:

  • $131 million is being saved through measures already announced (TTC fare increase, other revenue increases).
  • Reversing last year’s property tax freeze and increasing this year’s property tax rate by 3 percent, to a total increase of 6 percent — two years’ worth of normal increases — would increase revenues by $136 million.
  • Matching the average amount the city has saved over the last five years through cost cutting and efficiencies will reduce costs by $98 million.
  • Assuming the 2011 surplus is consistent with the average surplus of the previous 5 years, $181 million will be available.
  • Accessing the $88 million from the tax stabilization fund and readjusting the projected increase in costs of salaries and benefits to reflect a more likely increase of $116 million (double last year’s increase) will reduce the shortfall by $188 million.
  • The remaining $41 million budget shortfall is less than the revenues lost through the cancellation of the Personal Vehicle Tax.

Read the full report (PDF): Countdown to Zero:Balancing Toronto’s Budget
Read the overview flip sheet for the report (PDF): Countdown to Zero FlipSheet

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