3% Tax Hike? Right.

The news that Toronto’s property taxes are apparently “only” going up 3% this year is misleading because that’s the across the board rate. It doesn’t take into account many people will see significantly higher increases because they happen to live in hot neighbourhoods where housing prices are rocketing. Since taxes are based on the property assessment system, you get penalized for being forward thinking and moving into a neighbourhood before it becomes trendy. The city’s response is “well, at least your property value is going up” but that’s little consolation when your property tax bill climbs 20%.

We’re Doomed Financially…But Be Happy (?)

There is an interesting contract in the weekend papers in terms of Toronto’s future. The  Toronto Star’s GTA secton on Saturday has several stories about how the city is doomed financially because it simply doesn’t have the revenue and taxation sources to pay for all the services it provides. To be honest, it’s disheartening because it paints a picture of a city in financial crisis with only one way to go: down. Unless something dramatic happens - and I’m not sure it’s just a New Deal with Queen’s Park - all the things we like about Toronto will disappear: clean streets, social services, well-run community centres, low user-fees, accessible services for people with lower incomes, etc. Royson James offers up the more troubling scenario with the possibility that Toronto may have to declare bankruptcy one day - much like what New York City did. Meanwhile, the Globe’s John Barber tells us in Saturday’s paper to “don’t worry, be happy” - suggesting our concerns about traffic congestion, a lack of parking spots, etc. shouldn’t really concern us. Maybe, he’s the eternal optimistic, while the Star is riding the attention-grabbing doom and gloom pony. In any event, I’m feeling terribly uneasy about Toronto’s future. We just don’t seem to have the leadership to create a vision for the future or the financial formula to ensure the city keeps working efficiently. At some point, something’s got to give.

Budget Blues

Royson James had a good column last week (Feb. 15) about the city’s budget deficit - currently about $450-million to $500-million for 2006. He makes a good point in questioning why the city continues to hope that Queen’s Park will come to its rescue while ignoring the fact it makes no sense to continually dive into the pocket of residents through property taxes, user fees, water costs, etc. Unfortunately, there are mixed messages coming from city hall: they attempt to give themselves raises and bend every time their unionized employees threaten to withdraw services. I’m not sure why the city doesn’t face fiscal reality and simply say there’s no money in the coffers for higher salaries - just like most companies have been telling their employees for the past few years. Instead, Toronto continues to operate as if everything will be fine as long as Queen’s Park bails us out.

Budget Blues

Toronto apparently has a budget deficit for 2006 of more than $500 million. That seems incredible. It’s either a case of provincial downloading coming home to roost and/or bad financial management. So far, the politicians seemed focused on finding new sources of revenue - be it calling in some Toronto Hydro debt or raising property taxes…again. What about taking a deep look at the city’s expenses to find out if there’s some fat to be cut. We seem to have no problems spending $10-million for a new soccer stadium that will rarely see its 25,000-seat capacity filled. Explain to me how a city with a $500 million budget deficit can spend $10-million a soccer stadium? No wonder the province doesn’t want to bother bailing out the city any more.

Sneaky Raises

I’m not going to begrudge city councillors from raises but sneaking n a 12% hike over three years as a last-minute amendment is inexcusable. It was almost like they were so embarassed about giving themselves the money, they decided to see if no one would notice. Irregardless of whether they actually deserve it - and I think it’s not excessive given the amount of work people like Olivia Chow do - the process totally goes against David Miller’s transparency mantra. The behind-the-scenes raise exercise smacks of the pre-Miller days when no one scrutinized the flow of money too carefully. With Toronto being given new powers by the province, there will be no more excuses for financial hand-outs if the city comes up short due to bad deals or excessive spending. What concerns me, however, is that raises for police, councillors, etc. mean the city will need more revenue. However, one of the only mechanism it has to generate more revenue is property taxes.

Higher Property Taxes? It’s SAS’ Fault

Given all the controversy over sky-rocketing property tax assessments, you would think that anyone involved would keep a pretty low profile. SAS,  however, seems to think otherwise given it sent out a press release last week touting that its analytical software was used by the Municipal Property Assessment Corp. to determine property values. If this paragraph doesn’t rankle the blood, nothing will:

The recent property assessments being sent out across Ontario may have left many residents feeling angered, bewildered and perhaps even nauseous. Some wonder just how, in fact, MPAC arrives at what any given property is valued at.”

According to the press release, SAS analytical software takes into account multiple variables such as renovation work, recent homes sold, proximity to schools, parks and public transit to help accurately determine property value. The use of SAS is providing MPAC with the most timely, efficient and accurate modeling techniques in the industry,” the press release enthuses, adding that MPAC reduced the time it needs to assess three million properties from 12 hours to 2 hours. Isn’t it reassuring to know that MPAC is using software to figure out what your house is worth? Forget about things such as supply and demand, historically low interest rates and a willingness by banks to provide as big a mortgage as you’d ever need. Tell me how software equates those factors into a valuation? Maybe SAS can tell me why property assessment jumped nearly 40% in two years and provide me with the data needed to properly dispute it with MPAC? Now, that would be worthy of a press release!

 

 

Something’s Gotta Give

I don’t begrudge the Toronto Police for demanding and getting a raise - we should all be so lucky in this low inflation environment - but something has to give financially in Toronto. You can’t be handing out 3% or 5% salary increases when the only way to raise more revenue to cover these cost hikes is higher property taxes. At what point do homeowners say “it’s one thing to pay for municipal services but enough is enough”? So far, homeowners have been complacent about property tax hikes - almost as if there is nothing they can do. But I’m hoping people who look at their bills and wonder why taxes keep going up, services keep declining and people who work for Toronto are getting higher raises than the rest of us.