Toronto Mayor Rob Ford appears to be reconsidering his push for a property-tax freeze beginning in 2014, the year he stands for re-election.
"I never campaigned on that. I campaigned on, you know, the rate of inflation for property taxes," he told reporters Monday. "We were very fortunate to come out with a zero-per-cent tax increase [in 2011] very fortunate that next year we might be able to hold the line on taxes. I'm not quite sure. This is just the beginning of the budget process."
In a draft copy of his "budget guidance" to the city manager, obtained by The Globe and Mail, the mayor calls for a residential property-tax increase of no more than 1.75 per cent in 2013 and zero in 2014 and 2015.
The letter makes no mention of killing the land-transfer tax, something Mr. Ford said Monday he still plans to do, although it's "too early" to say when.
The mayor's comments came hours before city finance staff revealed how the municipal government's 2011 surplus grew from an estimated $154-million at the budget debate in January to $292.7-million at year's end.
The mayor and his opponents on council spent the weekend and most of Monday peddling competing explanations for the windfall.
"We found efficiencies. That's why we found the $140-million. It's tightening the ship," the mayor said.
The mayor's side cited belt-tightening; his rivals cited higher-than-expected revenues, largely from land-transfer taxes.
According to a report going to the budget committee next week, it's a combination of both.
Of the nearly $139-million nailed down in the fourth quarter, $57-million is classified as higher-than-expected revenue, and $93-million is classified as lower-than-expected expenses. (Some parts of the municipal government went over budget by a total of $11-million, which explains how the figures add up to $139-million.)
But those classifications can be misleading. For instance, the TTC went from being $14-million under budget at the end of the third quarter, to being $22-million under budget at the end of 2011.
That wasn't thanks to internal efficiencies – it was thanks to increased ridership.
As for the land-transfer tax, it was responsible for only $2-million of the extra $138-million nailed down in the fourth quarter.
However, the tax on transactions in Toronto's hot real-estate market accounted for $99-million, or more than a third, of the total $292.7-million surplus.
What is clear is that after a year in which Toronto council considered a laundry list of service cuts – most of which it ultimately rejected – the city has an extra $292.7-million on its hands.
"There's no reason to run around scaring the public, closing zoos and libraries. There's no reason to bully councillors, threatening their re-election," Councillor Adam Vaughan, a frequent critic of the mayor, said. "And there's no overwhelming reason to pat the mayor on the back."
Most of the surplus will go toward paying for replacement streetcars and topping up rainy-day accounts.
Budget chief Mike Del Grande warned his fellow councillors not to ask for any of that money to save services that were reduced or eliminated in this year's budget.
"They're very simple-minded," he said. "They're only looking at the operating side and they keep forgetting the capital side ... this is what got us in trouble, that kind of thinking. 'Oh we got money, let's spend it.' "