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An open letter to Torontonians on the city's financial situation |
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Fellow Torontonians:
Much has been written and said about the City of Toronto's financial situation.
I would like to share with you a package of information (PDF) that I believe will be extremely useful in understanding the issue. This package is practical, factual and easy to understand.
It has been my feeling that the larger debate at hand has become one about the kind of City we want Toronto to be.
There is now a need for all of us to consider the kinds of City services we expect and the important role of local government in delivering them to the residents and businesses of Toronto. Municipal services such as police, fire, ambulance, public transit, parks, recreation, garbage collection, recycling, roads, libraries and other important and established programs that support our communities promote a culturally vibrant and socially inclusive city. But new initiatives like the city's recently approved climate change plan and Transit City vision also require funding.
These are all fundamental to the kind of Toronto I want to build and the kind of city you voted for when you re-elected me last November.
Our case is clear. Toronto remains the only large world city that does not have access to sources of revenue that grow with the economy. Consider that in Toronto more than 40 per cent of our revenue comes from property taxpayers while in the United States, just 18 per cent of the money used to fund their cities comes from property taxes.
Simply stated, Toronto does not have the income required to pay for the critical services we have all come to rely upon let alone invest in this city. On this fact, there is no disagreement. The choice we are now left with is between cutting basic services, as we have regrettably seen in recent weeks, or protecting and enhancing them in a way befitting a 21st century city.
The reasons for this problem are clear:
- The City continues to be forced to divert money (some $729 million in 2007) needed for municipal services to pay for provincial programs.
- The City does not have the diverse sources of revenue required to fund city services. Property taxes alone can no longer be relied upon to deliver the services required and expected in Canada's largest city.
- Over the last nine years, the City has almost depleted reserves and exhausted other one-time solutions (such as selling assets and liquidating holdings) to pay for the annual operating costs of delivering core municipal services.
Much has been said about the City having its own financial house in order. The fact is the City is always reviewing programs and services to find efficiencies. However, one third of our budget goes to pay for provincially required social programs, about a third goes to emergency services and public transit, with other municipal services accounting for just under one-fifth of the City's $7.8 billion operating budget (or $1.4 billion).
Traditionally, it is only within this portion of the budget savings can be realized. Regrettably, all programs - including TTC and police - must now be looked at for service reductions in the absence of new revenues.
But with new revenue must also come a commitment to continuous improvement in service delivery. We will continue to look for the kinds of savings and efficiencies that have saved the city $700 million since amalgamation. And let's not forget that we continue to win awards for our financial planning models and for the high quality of our public services.
Efficiencies have been found, savings made and services maintained. But without new revenues and the provincial government taking back more of its downloaded costs, we will all see and feel the effects of service cuts that take this city backward. It was encouraging to see the provincial government this week agree to take back some of the downloaded costs, but there is still a long way to go and we must do our part.
City Council must be willing to make difficult choices that will maintain our City and deliver the services that make Toronto what it is. The first opportunity comes on Oct. 22 when council will debate a revenue package that includes a Land Transfer Tax and a Personal Vehicle Registration Fee which together would generate more than $350 million.
I'm well aware that no new tax is ever popular. But expecting homeowners and businesses to bear the burden of double digit property tax hikes is not realistic or fair. Seniors on fixed incomes and small businesses would be devastated by such a move. Introducing what amounts to a sales tax on the purchase of property with rebates for those making their first purchase is far more reasonable than an 18 per cent residential and six per cent business tax hike.
We must remember that Toronto asked for and received new taxing powers under the City of Toronto Act. These powers give the City the means to raise additional revenues that can be used to build a more liveable city. We have an opportunity to put these powers to good use by supporting the new taxes that will be put before council on Oct. 22.
The materials attached have been developed in order to assist you in understanding this important issue. Contact my office or your local councillor and tell me and them how you want your city government to stand up for the Toronto we all want.
What is at stake is nothing less than the very quality of life we currently enjoy in our City.
Sincerely,
Mayor David Miller
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