Thread by @GraphicMatt

The City of Toronto’s budget has launched! Some observations from the meeting and presentation — linked here — will be in this thread. toronto.ca/legdocs/mmis/2… (PDF)

Right near the top, here’s my big question answered. The 2023 budget includes a whopping $933 million in assumed support from the provincial and federal governments. The city is also still looking for $484 million to go toward the 2022 shortfall.

In sum: “The City requires continued partnerships and immediate funding commitments of $1.56 billion (2022 & 2023) in total to avoid service impacts or reductions to capital spending.” Immediate!

Slide 12 brings us the first reference to this year’s residential property tax increase: at 5.5%, it’s higher than expected, and a responsible move given the gap would be even bigger if Tory tried to go with a lower increase.

Per this graphic @neville_park put together last year for @cityhallwatcher, this 5.5% residential increase will be the largest property tax increase in the history of the amalgamated city. datawrapper.de/_/FRIx8/

If $933 million in COVID funds and $145 million housing/shelter funds isn’t provided, city will use more capital dollars to plug the gap and deplete emergency reserves. Staff say using same strategy in 2024 isn’t possible, so we’re really careening right up to the edge of a cliff

Speaking of 2024, surely this budget situation will improve as we get further away from the worst of the pandemic, right?

Nah. Next year the city is estimating an opening budget gap of between $1.465 billion and $1.672 billion.

The 5.5% residential property tax increase works out to about $183 for the average home, or $15.25 a month.

But oh, a twist: the 5.5% increase does not include a 1.5% increase to the CIty Building Levy, which adds another $100 a year.

So the full residential increase is 7%.

No major surprises in the water and garbage rates. They both go up 3% — adds about $29 to the average annual water bill and between $5 and $16 annually for garbage, depending on the size of your bin.

Here’s how the property tax bill will break down in the 2023 budget. The biggest line item is emergency services. (I wish they wouldn’t lump fire and paramedics in with the cops here — most of this is the police budget.)

On the capital side, the city says the state-of-good-repair backlog has been getting worse. It’s set to basically double, from $9.5 billion today to $18.8 billion in 2032. The biggest impacts are on transit, transportation, recreation and city buildings.

“Bill 23 was announced with the intention of increasing affordable housing, however it has a direct negative impact on the City’s ability to deliver the HousingTO Plan.”

Cap budget is currently assuming full reimbursement of lost revenue. Big risk if that assumption is wrong.

Comparison of property tax bills is more limited this year, only comparing Toronto with “Large GTHA Municipalities, Vancouver, Ottawa, Montreal & Calgary.” Compares with non-Ontario munis is tricky due to different service delivery models. Toronto still low in GTA comparison.

City CFO Heather Taylor confirms some big news: the city will be discontinuing mechanical leaf collection in Etobicoke. “This isn’t a city-wide service and we were at end of a very long-term contract.”

City is assuming revenue from the land transfer tax will be flat in 2023 — no increase from 2022 — at about $950 million.

Some decreases in the 2023 plan :

Fire Services: -0.1%
Employment & Social Services: -0.4%
Ec Dev & Culture: -4.5%
Enviro & Climate: -1%
Tech Services: -2%
Info Security: -15.7%
City Manager: -6.6%
City Clerk: -22.4%
Council -1.9%
Auditor: -4.9%

toronto.ca/legdocs/mmis/2… (PDF)

But the gross budget for the mayor’s office is set to rise 37.5%, from $2.14 million to $2.94 million.

Looking at these budget numbers, it’s really hard to imagine a scenario where Tory is able to leave in 2026 with city finances (and city services) in a good, sustainable place. This is all very grim. And it’s going to be worse for the next mayor.

City CFO confirms that this budget extends Tory’s City Building Levy — a 1.5% annual residential property tax increase dedicated to transit and housing capital projects — all the way to 2035. Was previously set to sunset in 2025.

Spoiler: By 2032, nearly $2 billion in spending on the Gardiner will see its maintenance backlog drop to almost nothing.

At the same time, the TTC’s maintenance backlog will grow by $6.3 billion, and Transportation Services by $5.2 billion.

https://twitter.com/dmrider/status/1612841642288992257

In a letter to the Budget Committee, Mayor John Tory has declared various conflicts of interest due to his relationship with Rogers, promising to stay out of budget discussions related to IT and telco services. He’s also staying away from the Exhibition Place budget.

On questions from Councillor Gord Perks, finance staff calculate on-the-fly that the operating and capital budgets assume a total of $3.378 billion in funds from other governments, including Bill 23 offsets.

The finance staff at this meeting keep insisting that this budget is balanced, despite all the funding assumptions, because of the Plan B to use capital funds to plug holes.

It’s a bit like a person saying they’re not actually in debt because they could always sell a kidney.

The budget launch meeting wraps up with a few probing questions from councillors. They’ll get into the nuts and bolts on Thursday as the division-by-division review begins. I’ll keep an eye on things.