Mayor John Tory defended his plan to fill a hole in the city's operating budget Friday during a budget committee meeting at city hall.
On Thursday, Tory said that to pay for an $86-million shortfall in the operating budget created by the province’s decision to roll back social housing funding, the city would essentially borrow from itself.
According to Tory, the city will temporarily reduce its capital contributions by $130 million over the next three years and will pay back that money by finding efficiencies over the next six years and increasing property taxes by 1.7 per cent every year until 2018.
This plan, Tory said, will restore the capital budget to where it should be by 2020.
About $25 million in savings have to be found in this year’s budget, he said, adding that he has asked the TTC and the Toronto Police Service to help cut a combined $10 million from the 2015 budget.
But some councillors are not satisfied with the mayor's proposal.
Coun. Gord Perks said the city should deal with the funding gap through property taxes. Another suggestion was to bring back the vehicle registration tax that was previously scrapped by the Ford administration.
While speaking to reporters at a news conference Friday, Tory said he was faced with the option of either substantially gutting services or substantially raising taxes.
“I chose to take neither of those courses and instead to take a middle course that smoothed out the effects of some reductions you’ve seen in funding from the provincial government and made arrangements in, I think, a way that’s creative but entirely prudent and responsible,” he said.
Coun. Josh Colle was supportive of Tory's decision not to increase property taxes any further.
"We are always sensitive in the city to property tax increases because of how many residents do feel the burden and the pinch of that so we are trying to be creative and look at other options and we can't just always have the knee jerk of just (increasing) property taxes," Colle said.
Some members of the budget committee called on the city to take a look at other revenue options, such as municipal income and sales taxes.
“That is how they pay for these expenses in New York City. That is how they pay for them in Chicago and those are our peers,” Coun. Shelley Carroll said.
“This city has to look at sales tax and income tax.”
City manager Joe Pennachetti said Friday that Toronto is probably the only city of its size that funds all of its services through property taxes.
“There has to be change at some point in time in order for us to get through all of the growing pressures that we have from transit to housing to all the social services that we now have to fund from property taxes,” he said.
