The property tax increase on single family homes will hold at 3.75 per cent this year, after the city's executive committee dug into money slated for a snow-clearing reserve fund to deal with a last-minute glitch in the 2008 operating budget.
The committee voted to divert $7 million of a $16 million surplus to deal with some last-minute calculations that would have changed the 3.75 residential per cent property tax increase Mayor David Miller and Budget Chief Shelley Carroll (Ward 33, Don Valley East) promised in January to 4.02 per cent.
Those calculations centred around a policy to shift the property tax burden from small businesses onto homeowners. The increase would have been small - $7.19 for an average home assessed at $365,468 - but councillors on the executive committee were anxious to stick with the figure that had been promised.
So that money came from funds that would otherwise replenish Toronto's Winter Reserve Fund, an account used to cover cost overruns in particularly harsh winters such as this past one, where the city must spend more than its budgeted $65 million to clear streets and sidewalks.
"This is not the ideal way to do it - I would like to do it differently in the future," said Carroll as she asked the executive committee to pass her amendments. "I'll own it, that I thought we had calculated the shift earlier in the process."
Carroll and the budget committee took some heat from opposition members of council for the surprise increase and for allowing any increase at all in property taxes, which at 3.75 per cent will add about $80 to the average homeowner's annual tax bill.
Ward 34 (Don Valley East) Councillor Denzil Minnan-Wong chided Carroll and Miller for trumpeting successes in the budget, given how steeply property taxes have risen since 2003 when Miller was first elected.
"The reality is that since 2003, taxes have gone up by 17.7 per cent while inflation has only gone up 9.8 per cent," he said. "That's nothing to be proud of. I think the budget committee should be embarrassed by that number, yet they want to give themselves a pat on the back."
Miller, however, said the budget marked a turning point for the city. With the imposition of the new land transfer and vehicle registration taxes, Miller said the city is poised for sustainability.
"I believe this year marks the day we will stop debating how to afford a city and start debating what we want to afford," Miller said. "This council set its course very clearly through its agenda for prosperity. It said the city has to do its part, and we have to think of ourselves in our world context, we have to focus on creativity and have to remember above all it's about one Toronto. That's exactly what this does. It preserves services by keeping tax increases modest and yes, for different classes they're different."
In 2008, the overall increase in taxes is 2.3 per cent. The largest increase is for single family homeowners - at 3.75 per cent. Business, industrial and multi-residential properties will see a 1.25 per cent increase. And small businesses assessed at less than $1 million will see their property taxes reduced by 1.3 per cent.
The budget will go before Toronto Council at a special meeting April 1.