Toronto's executive committee has voted to raise residential taxes 1.75 per cent, including a 0.5 per cent levy for the Scarborough subway.
The proposed tax increase – which requires council approval next week – hit the target set by Mayor Rob Ford, who was the only committee member to vote against it. Mr. Ford expressed dismay that the committee was counting on higher revenue from the land transfer tax – which he has vowed to eliminate –to finance program enhancements, calling it a return to old habits of unsustainable budgeting. He repeated a promise to introduce $50-million in unspecified cuts next week at council.
"It goes back to the old mentality of spend, spend, spend, tax, tax, tax," he told reporters.
The committee's recommended 1.75-per-cent residential tax increase will translate into a 2.23 per cent hike for homeowners when adjusted to account for a long-standing city policy to reduce commercial and industrial rates. It would add $56.30 to the average residential tax bill.
Mr. Ford used the Wednesday meeting to rail against his colleagues on executive and take shots at city staff. "This is the worst budget I have ever seen," Mr. Ford said after grilling Toronto's city manager and chief financial officer over staffing numbers.
Councillor Denzil Minnan-Wong, a potential rival in next fall's mayoral election, noted the budget was mostly set before a November council vote stripped Mr. Ford of much of his authority after he admitted to using crack cocaine.
"He was there from January to November. What did he do during that time?" Mr. Minnan-Wong asked, noting part of the tax increase was for the subway plan Mr. Ford championed. "He points the finger at us. That's not leadership. That's not being a leader. That's being a coward."
The tax increase is lower than that recommended by staff and the way it was achieved prompted a warning from the city's CFO, Rob Rossini.
Under a plan presented by Councillor David Shiner, the city will increase its 2014 revenue forecast for the land transfer tax to limit increases to property taxes. Some of that extra would be used to fund improvements in service and restore $2-million to the fire budget.
Mr. Rossini cautioned that increasing the annual forecast for the tax above $350-million could backfire if the housing market falters. "As your CFO, I cannot responsibly say that is the right thing to do," he told the committee.
Staff were caught off guard by Mr. Shiner's proposal, and in an unusual move, the committee recessed while finance staff worked out its impact on tax rates.
A staff proposal to raise residential taxes by another 0.5 per cent to fund the city's extreme weather reserves, depleted by the December ice storm, was rejected. The committee voted to use any unexpected 2013 surplus for that purpose.
Deputy mayor Norm Kelly, who became chair of executive when council stripped Mr. Ford of most of his power, said he was pleased with the lower tax rate, but expressed concern about the way it was achieved and questioned what will happen next week at council. Mr. Kelly voted against Mr. Shiner's motion and said he would have preferred a slightly higher tax increase to fund programs.