Wellesley Institute backgrounder:
Toronto’s 2008 operating budget:
Balanced, but at what cost?
January 29, 2008
The headlines all proclaim the news that the City of Toronto has released a draft 2008 operating budget that is fully balanced with only a modest tax increase for home owners.
Overall, Toronto’s proposed 2008 operating budget comes in at $8.2 billion – that’s up 4.2% from 2007 or slightly more than $327 million increase from last year. The city is covering that increase with a combination of new taxes, tax growth, the upload of some costs to the province and some cost cutting.
Despite the overall budget increase, the city’s Shelter, Support and Housing Administration has been flatlined for 2008. This means that, taking into account inflation, there will be fewer dollars to meet the housing and shelter needs of the people of Toronto.
A more detailed budget analysis will follow shortly. Here are some quick highlights:
– Overall, Toronto spending on shelters and housing is recommended at $710 million, down $10.6 million from the $720.7 million in 2007. Toronto gets about half a billion dollars from the federal and provincial governments for its housing and hostels, but this year the revenue from senior levels of government is expected to drop by about $10 million. That leaves the net cost to the city at $253.8 in 2008 (the same level as 2007).
– The number of bed-nights in Toronto’s homeless shelters will continue the steady decline of the past four years. The number of bed-nights is set at 1,377,876 in 2008, down 3% from 2007 and down more than 13% from 2005.
– The number of new affordable homes is set at 528 for 2008. That’s about half of the city’s official target of 1,000. More than half the new homes scheduled for 2008 were also part of the targets for 2007, so the number of net new homes is 228 – one-quarter of the city’s target.
– Tenants in Toronto, who have average incomes that are less than half of owners, pay a municipal property tax rate that is three and one-half times higher than owners (in 2007, the tax rate for owners was 0.588% and tenants faced a rate of 2.088%). While owners typically pay their property taxes directly to the city, the property tax for tenants is usually “hidden” in rent payments and not as visible. The property tax for some new rental properties is set at the owner rate, but most of the half of Toronto households that rent pay the inflated rate.
More to follow…