City staff are recommending a 2.5 per cent property tax hike as part of the 2014 operating budget, setting the stage for a political fight between embattled Mayor Rob Ford and budget chief Frank Di Giorgio.

Ford has called for no more than a 1.75 per cent property tax hike in 2014, but Di Giorgio has suggested that keeping the increase below two per cent will be nearly impossible, given the costs faced by the city.

Speaking with reporters after the $9.6 billion operating budget was tabled Monday morning, Ford called the proposed increase “atrocious” and said he will not support the budget as constructed.

The proposed increase will cost the average homeowner about $64 a year.

“It is so disappointing that as soon as they reduce my powers they go back to the old tax and spend ways,” Ford said. “It is embarrassing that the people of the city have to pay over 2 per cent in property taxes when we had it locked in at 1.75. This is absolutely atrocious and I will not be supporting this budget, I guarantee you that.”

The tax hike includes a 0.5 per cent increase, which would be used to help fund an estimated $400 million shortfall in the extension of the Bloor-Danforth subway line into Scarborough.

In order to fully cover the shortfall a 0.5 per cent increase will also be required in 2015, followed by a 0.6 per cent increase in 2016.

The dedicated tax increases were effectively approved by council when it voted in favour of the Scarborough subway in October.

“We are going to have to defend staff recommendations because the mayor is reverting to his old councillor ways and talking about a budget that is just not possible,” former budget chief Shelley Carroll told CP24 Monday morning. “He is being disingenuous. We heard in July when we were considering the Scarborough subway that we were going to be taking on $1 billion more in capital and that we would have to see about a 2 per cent property tax increase. He raised no objections at that time and now he is back to old Rob Ford who thinks you can have all these things for free.”

Land transfer tax cut not included in budget

In addition to capping the property tax hike at 1.75 per cent, Ford has also called for the municipal land transfer tax to be cut by 10 per cent in 2014; however the recommended budget keeps the land transfer tax at its current rate.

The tax brought in $344 million in 2012 and Deputy Mayor Norm Kelly has previously said that reducing the tax while maintaining services would be difficult.

“It’s the gravy train all over again and that is all I have to say,” Ford told reporters, repeating his campaign slogan from 2010.

“All they want to do is tax and spend and tax and spend and I can assure you we are going to inform the people on what they are spending because it is getting out of control,” Coun. Doug Ford added. “They just want to continue raising taxes on the backs of the hardworking people of Toronto.”

Budget balanced without use of surplus

The recommended budget was balanced without making use of the previous year’s surplus.

Some of the more significant areas of spending include:

  • $1.7 billion for public safety, including money for additional paramedics, police officers and fire prevention officers
  • $1.7 billion for the operation of the TTC
  • $639 million for shelter, support and housing administration
  • $410 million for parks, forestry and recreation
  • $184 million to operate the Toronto Public Library system

The budget will be debated over the coming weeks and is expected to go to council on Dec. 16.

Speaking with CP24 Monday afternoon, Deputy Mayor Norm Kelly said he is hopeful that the debate doesn’t get too heated.

"The budget is our opportunity to invest wisely in the day-to-day services and at the same time prepare for the strategic challenges that lie out there," Kelly said. "It is a process that takes a few weeks but if everyone is rational and responsible we should have a good outcome."

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