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The property tax crunch Add to ...

Is your city or town struggling to balance its budget?

Have your property taxes increased?

Have investments in local infrastructure such as roads, parks, sewers and bridges been put off too long?

According to the Association of Municipalities of Ontario, these types of local problems can be traced back to a decision by the Progressive Conservative government of Mike Harris to offload provincial costs for public transit and social services on to municipalities.

On Jan. 1, 1998, Ontario became the only province in which local governments pay part of the cost of provincially mandated social services such as social assistance, public health care, child care, homes for the aged, social housing, disability and drug benefits.

Nearly a decade later, most Ontarians - including the leaders of the main political parties - agree the system is not working.

The AMO says offloading has resulted in a $3.3-billion gap - the difference between what municipalities spend to fund health and social programs, and what the province gives them to pay for these programs.

We were pleased that Pat Vanini, Executive Director of the AMO, agreed to answer questions on these issues as submitted by our readers. Her answers are now available at the bottom of this page.

Ms. Vanini has been the Executive Director of the Association of Municipalities of Ontario (AMO) since 2002.

AMO is non-profit organization that has more than 400 of Ontario's 445 municipal governments as members.

Prior to joining AMO, Pat spent 18 years working for the Ontario government, working on matters related to planning, municipal issues and housing programs.

Editor's Note: globeandmail.com editors will read and allow or reject each question. Questions may be edited for length, clarity or relevance. HTML is not allowed. We will not publish questions that include personal attacks on participants in these discussions, that make false or unsubstantiated allegations, that purport to quote people or reports where the purported quote or fact cannot be easily verified, or questions that include vulgar language or libellous statements. Preference will be given to readers who submit questions/comments using their full name and home town, rather than a pseudonym.

Brodie Fenlon, globeandmail.com: Thank you, Ms. Vanini, for joining us today.

We've had several thoughtful questions on this subject, so we'll turn it over straight to our readers.

Alex Mayer, Toronto: Over the past two terms of provincial governments, downloading of social services and transportation onto Toronto's page has been the rule of the day. Just what does the Province support any more and - with the savings they've realized over the years - why do we constantly hear there are no funds in the coffer?

Pat Vanini: In effect, the downloading of the 1990s transferred a significant portion of the provincial government's operating deficit to municipalities.

It allowed the province to balance its books and, more recently, to experience significant budget surpluses.

Currently, more than $3 billion of what should be provincial costs are still paid for by property tax-payers across Ontario.

This has forced municipalities to increase property taxes steadily and to defer spending in other areas like infrastructure.

Clearly, the situation is not sustainable.

If you think about what services you get from each order of government, you will probably be surprised to learn that only about seven or eight cents of each tax dollar paid by a person in Ontario goes toward municipal services. The rest goes to the provincial and federal governments.

Peter Welsman, Waterloo: The property tax system must be reformed. A cap on assessment increases is a start. But the problem of our municipal taxes needs a much more drastic fix.

When Mike Harris downloaded responsibilities to the municipalities, he did not broaden their tax base to allow them to pay for the extra services. Our towns and cities cannot operate on property taxes alone.

All too often, huge taxes are being levied on people who have no ability to pay. We should not be taxed out of our homes.

Municipalities must be given a slice of the sales tax revenue or income taxes or both. That way people would be taxed on their ability to pay, not on the insane fluctuations in the real estate market.

Do you agree?

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