Wednesday, January 8, 2014

Toronto budget committee approves 2.25% tax hike

TORONTO - Mayor Rob Ford is promising a budget battle at city council.

Councillors on the budget committee finalized the 2014 budget on Wednesday — agreeing to a 2.25% tax hike rather than the proposed 2.5% increase. The committee also refused to tinker with the city’s land transfer tax.

A 2.25% increase, if approved by city council later this month, would add $57.50 to the property tax bill imposed on a typical home — one assessed at $498,000.

Ford said he can support the budget and wants spending cuts to lower the tax increase to 1.75% and at least a 5% reduction in the city’s land transfer tax.

“It’s not me, this is what the people want,” Ford said after making a brief appearance at the budget committee.

The mayor — who has been stripped of most of his powers and no longer steers the budget process — promised to propose at least $50 million in savings to city council during the budget debate planned for the end of the month.

“If they support it, we’ll have 1.75% (tax hike) and services will be better, they won’t be touched,” Ford said. He refused to give specifics about the savings or what he might propose contracting out.

“I will show you on the floor of council,” he said

The budget committee’s recommended 2.25% tax increase includes a 0.5% hike to help finance the Scarborough subway.

Councillor Michelle Berardinetti said a 1.75% total tax hike was “not achievable.”

She stressed that “unless you’re going to have major cuts” the tax hike couldn’t be limited to just 1.75%.

Ford also unsuccessfully urged the budget committee to start to cut the land transfer tax.

The committee voted 4-2 to leave the land transfer tax alone.

Deputy Mayor Norm Kelly said he’ll spend the next few weeks urging councillors to support the budget.

“I think that this is a reasonable, balanced, win-win budget,” Kelly said.

Councillor Doug Ford — the budget committee vice-chairman — argued the tax hike could be lower.

“I’m disappointed with the committee,” he said.

The committee also voted to have the city start funding the High Park Zoo once again and standardize library hours across the city.


What does the property tax hike mean for residents?

n A 2.25% increase (which was approved by the budget committee) would mean the average home would pay $57.50 more this year.

n If Mayor Rob Ford gets his way and the tax hike is limited to 1.75%, the average home would pay $44.50 more.

n City staff had proposed a 2.5% tax hike which would have added $64 to the average home’s tax bill.

n And just in case you’re wondering, the Scarborough subway property tax hike of 0.5% (which is included in all the hypothetical tax hikes) means the average home is paying $13 more on its property tax bill.

Note: The city bases the tax hike impact on a house assessed at $498,000.

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