City budget committee facing $57.4M shortfall

TORONTO – The city is currently facing $57.4 million shortfall according to the 2016 preliminary operating budget.

Both the operating budget and the capital budget were tabled at Tuesday’s budget committee.

City staff say a 2.17 per cent property tax hike would bridge that gap, but Mayor John Tory has previously pledged to keep property taxes at 1.3 per cent, or at the rate of inflation.

“Both the budget committee and city council will be facing a number of difficult decisions in the weeks ahead,” said the city’s budget chair, Councillor Gary Crawford.

Crawford said after the budget meeting on Tuesday that he plans to keep property taxes at 1.3 per cent.

“It isn’t sustainable to balance our budget through tax increases or service cuts,” Crawford said.

“We need to focus our attention on long term solutions that will ultimately make this city run more efficiently.”

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But the budget shows that if property taxes were to be kept at the rate of inflation, an additional $23 million would need to be freed up in order to see a full balanced budget.

The budget also doesn’t account for $67 million worth of additional council-approved enhancements which include TTC service improvements and poverty reduction services.

Councillor Gord Perks said many services that were announced and promised by Tory are not funded in the preliminary budget.

“We have … something approaching $100 million worth of things Torontonians believe they are going to get but this budget doesn’t imagine,” said Perks.

“I think what’s unrealistic is to promise Torontonians the services the mayor has  been promising but at the same time saying you are going to keep taxes at the rate of inflation. You just can’t do it.”

On Monday, Tory issued an open letter outlining priorities for the budget which include increasing the number of paramedics available to respond to emergency calls and to provide additional investment for specific issues such as child nutrition programs, jobs for youth and seniors’ care.

Crawford said he fully supports Tory’s recommendations.

“I am confident that we can invest in those priorities and  keep taxes at the rate of inflation,” he said.

READ MORE: Tory asks budget chair to consider spending freezes, target investments

Less than two weeks ago, Tory announced a proposed new City Building Fund that would require a 0.5 per cent tax hike, where money would be used for transit and housing projects that will be considered and possibly implemented by 2017.

Both the budget committee and executive committee will be reviewing the 2016 budget before it is presented to council in the New Year.