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Mississauga mayor Hazel McCallion argued that not borrowing money would entail either raising property taxes 25 per cent or leaving roads and community centres to crumble.Fred Lum/The Globe and Mail

In 2012, Mississauga will see better public transit, not a single service cut and a tax increase of just under 3 per cent if city council approves a proposed budget tabled on Monday.

In contrast to Toronto, which is chopping programs to rein in spending, staff at the suburban city have recommended holding the line on current operations and making a few modest improvements. Councillors, meanwhile, called for the provincial government to give them the power to levy a vehicle registration tax like the one Toronto scrapped last year.

The tax hike proposed in the Mississauga budget, when added to taxes levied by the Region of Peel, which provides some municipal services, and the provincial education levy, would amount to 2.8 per cent next year, one percentage point higher than the increase faced by Toronto residents.

A projection last June forecast a rise of more than 4 per cent, which staffers cut back by putting off new projects. The proposed budget still contains some new spending, including $2.1-million to add buses to the busiest transit routes at rush hour and $100,000 for new arts and culture grants.

The top expenditures, however, will be on infrastructure. Mississauga is undertaking several major projects – including a bus rapid transit corridor along Highway 403 and the revitalization of a former industrial site on its waterfront – that will require tens of millions of dollars of investment in coming years. At the same time, much existing infrastructure, from roads to sewers, is due for repair.

In total, the city will have to borrow more than $400-million over the course of the next decade, the first time it has taken out loans since the 1970s. Finance director Patti Elliott-Spencer said Mississauga's debt plan is prudent, with a cap on borrowing and a percentage of tax set aside to pay off loans.

It wasn't enough to convince councillor Bonnie Crombie, who evoked the spectre of the European debt crisis.

"I'm saddened that we are at this point," she said. "Debt is the single biggest problem across the world. ... I don't know that it's sustainable."

Mayor Hazel McCallion and fellow councillors were quick to argue that not borrowing money would entail either jacking up property taxes by 25 per cent or leaving roads and community centres to crumble. They also pointed to Toronto, which is billions of dollars in debt, to suggest taking out a bank loan of several hundred million is a reasonable course of action.

The most pointed comparison with the metropolis to the east, however, came during discussions on raising additional revenue. Five years ago, Queen's Park allowed Toronto the authority to impose taxes on land transfers and vehicle registrations, a power that no other municipality in Ontario has. Mayor Rob Ford abolished the latter last year and has pledged to eliminate the former.

Several Mississauga councillors said they would gladly take the money.

"This is something we need to start insisting at the province – we need these tools," councillor Jim Tovey said. "Looking at Toronto's budget, it makes you green with envy."

City manager Janice Baker added that a vehicle registration tax alone would cover Mississauga's annual spending on roads; a land transfer tax would more than pay for all the proposed increases in the budget.

Council will continue deliberations and hold public consultations next month. The budget is set for a final vote in February.