Toronto Deputy Mayor warns of unbalanced budget

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The 2014 budget that will go to Toronto city council next week is not balanced, says deputy Mayor Norm Kelly, who is lobbying for a higher tax increase to fill the gap.

Toronto city hall is set for a heated debate, as the divided council – including its duelling leaders – attempts to come to a compromise over the budget. Council will debate the budget approved by executive committee on Wednesday, including a 1.75 per cent property-tax hike. But Mr. Kelly said there are "inherent contradictions" in that budget, and he is supporting 2.23-per-cent tax hike instead.

Mayor Rob Ford, meanwhile, is not happy either, calling it "the worst budget ever" – despite meeting the 1.75 per cent target he set.

"I think changes will have to be made," said Mr. Kelly, who added that the budget approved by executive committee calls for $8.1-million more in land-transfer tax revenue than what city staff forecast.

"I just hope that over the next few days or so, as people understand the complications of the budget that will be presented to them, that they'll be equipped to make the necessary decisions, whatever they may be, to bring it back to a balance that fits within the budget parameters."

At issue is the plan presented by Councillor David Shiner and approved this week, which limited the property-tax hike by increasing the city's revenue forecast for the land-transfer tax. City staff have cautioned against increasing the forecast above $350-million. But Mr. Shiner's motion, coupled with the executive committee's approval of $4.8-million in funding for a slew of programs, would total $358-million.

Since Mr. Ford was stripped of most of his authority by council in November, Mr. Kelly has tried to get a consensus among councillors on the budget plan. But with less than a week to go before Wednesday's meeting, it's unclear whether that will happen.

The budget includes several measures likely to be challenged on the floor of council, including a 0.5-per-cent levy to fund a Scarborough subway extension.

And the mayor himself – who opposes executive committee's budget because it relies on higher revenue from the land-transfer tax in order to finance program enhancements – is promising to present more than $50-million in spending cuts on the floor of council.

"The budget that was passed by executive committee is fundamentally unsound," said Councillor Gord Perks. He pointed out that Mr. Shiner's plan passed executive with just six votes.

"It could unravel very quickly," he predicted. "I don't see where the majority is going to coalesce yet."

And Councillor Denzil Minnan-Wong, a fiscal conservative who voted for the budget at executive, said he will not support any moves to increase spending at council unless they are offset by savings.

"I will vote for it in its present form, but if there is one additional ounce of pork added to it, I will vote against it," he said.