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2005 Toronto Budget Bail-out

Here's the situation in this year's city budget struggle…

  • The Province has offered Toronto a $45-million bailout for this year's municipal budget.
  • The City had been asking for $92.3-million
    • $20-million was for deferral of a loan that the province gave us when they forced the cities to amalgamate (I guess it was meant to be a temporary step before the tremendous merger savings were realized -- ya, right)
    • The $72.3-million is the amount the City says they are being shortchanged by the Province on social services funding
  • The Province said in their letter that Toronto's administrative costs for welfare had increased 42 per cent since 2001, even though the city's welfare case load decreased slightly during that same time. This was their rationale for not accepting responsibility for the extra social services costs. It's the first I've heard of it, so I don't know what to say.
  • When the province handed over the $45-million, they made a meaningless declaration that $20-million was for the TTC and $25-million was to avoid a commercial property tax increase. These statements have no consequence, except that they want to put the onus on the City for the fare and tax increases.
  • If the Province is concerned about Toronto commercial property taxes, why are they still charging City businesses a special rate -- higher than other municipalities -- that costs us $120-million?
  • Conservative budget chief David Soknacki told reporters: "We all believe we were not elected to gut services, neither the Premier, the mayor nor myself. But this is exactly what this [the provincial announcement] does."
  • The Toronto Star suggests that the City will make up the difference with a further tax increase. However, I wouldn't rule out cuts. I suppose it depends on how seriously David Miller is married to his rate-of-inflation-only tax increase election vow.
  • Then again, both the Globe and Star articles referenced above say that David Miller will be speaking to Dalton McGuinty about this. Just like the NHL situation, the final offer may not be so final.



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