Countdown To Zero: Balancing Toronto's Budget

Countdown to Zero:Balancing Toronto’s 2012 Budget November 17, 2011 Sheila Block Director of Economic Analysis, Wellesley Institute November 17, 2011

Countdown to Zero: Two Questions• Is the City in a financial crisis?• Are cutbacks to services and asset sales necessary to balance the budget?November 17, 2011 | 2www.wellesleyinstitute.com

Opening budgetary pressures: 2007- 2012 900 800 821 774 700 706 679 600 615 500 562($ Millions) 400 300 200 100 0 2007 2008 2009 2010 2011 2012November 17, 2011 | 3www.wellesleyinstitute.com

What is and isn’t different this year?Different• Unlikely federal, provincial governments will step in• Property tax rate freeze + cancellation of the Personal Vehicle Tax = $132 million in lost revenueNot different• City is obligated by law to balance its operating budget• Budget process is about eliminating the “operating shortfall” - gap between next year’s expenditures and this year’s revenuesNovember 17, 2011 | 4www.wellesleyinstitute.com

What are the Mayor’s solutions to address the shortfall?Service review program • Core services review results: o90% of City services are “core” o8% of City services are “traditional”10% across the board cutsOther solutions?November 17, 2011 | 5www.wellesleyinstitute.com

How have we handled the budget shortfall before? 91 Prior year surplus 181 Funding from other levels of 37 government Cost cutting measures Increased municipal revenues Reserve 134 Property taxes *Figures are 2007-2011 135 Average ($ Millions) 98November 17, 2011 | 6www.wellesleyinstitute.com

How can we get Toronto’s budget shortfall to zero? 900 Measures that bring 774 the $774 million 800 shortfall down to zero: Opening operating shortfall 700 Adjustment to salary and benefit cost increases -100 600 Prior year surplus($ Millions) TTC fare increase 500 -181 Tax stabilization fund 400 -30 2 Year normal property tax increase -88 300 Assessment growth Municipal Land Transfer Tax growth 200 -136 -30 Other revenues -25 100 -46 41 Cost reductions 0 -98 Remaining Shortfall November 17, 2011 | 7 www.wellesleyinstitute.com

Conclusions• Councillors have choices• Scale and scope of this year’s shortfall is no different than other years• No need for drastic cuts to balance this year’s budgetNovember 17, 2011 | 8www.wellesleyinstitute.com

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Countdown To Zero: Balancing Toronto's Budget

by Wellesley Institute on Nov 17, 2011

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Countdown To Zero: Balancing Toronto’s Budget — Presentation Transcript