Property taxes could rise 3%, Ford warns

Toronto may have to raise property taxes by up to 3% next year in order to balance its books, Mayor Rob Ford told radio listeners Friday morning.

“At the very, very most I’ve said you can raise property taxes, at the most, 2½, maybe 3%,” Mr. Ford said on The John Oakley Show. “We didn’t have a property tax increase last year, and I said that’s it, we’re not going one dime higher than that.”

Mr. Ford promised during his 2010 election campaign to keep any tax hike at the rate of inflation. Canada’s inflation rate hit 3.7% in May, while the core inflation figure, which factors out volatile items including food and gas, was 1.8%.

He also made a splash on his first day in office by announcing a property tax freeze in 2011. He also succeeded in killing the vehicle registration tax, which brought in about $64-million a year.

The city is facing a $774-million budget gap in 2012. Consultants are in the midst of a massive service review designed to separate the “need to have” services from the “nice to haves.” Consultants have presented a menu of cost cutting measures, such as eliminating daycare spots, selling long term care homes, planting fewer trees, and scaling back on snow removal.

During the radio interview, Mr. Ford continued to leave the door open to possible layoffs.

“The last thing we want to do … is lay off, but when [paying salaries] makes up 80% of your budget, there’s a lot of gravy there, there’s a lot of people and unfortunately there’s just not enough work to go around,” said Mr. Ford. “In business the first thing you look at is your labour, and your labour should be making up, maximum, 20% — not what we’re at, 80%. It’s just unheard of.”

City documents show the salaries and benefits of its 53,000 workers account for about 48% of operating budget.

The city is offering a buyout package to 17,000 city workers, not including police, firefighters, TTC workers, health workers and librarians. The Toronto Police Service, tasked with shaving its own costs, is also looking at cutting back its workforce.

“It’s going to be short-term pain for long-term gain,” Mr. Ford said of trimming the city’s workforce. “It’s going to cost us a bit now, but it’s going to save us millions and millions in the long run.”

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Source: National Post