hkskyline
December 19th, 2004, 08:24 AM
Suburbs grapple with price of growth
Royson James, Toronto Star
18 December 2004
Once upon a time, senior citizens rode the buses for free in Mississauga and residents could count on paying the same property taxes year after year. And in Markham, the mayor boasted about no tax increase for five, six, seven, eight ... years.
Toronto residents drooled in envy. How could this be possible right across the street in Peel, York or Durham?
Not any more. The regions around Toronto, just like the city core itself, are running out of luck and running low on cash. And in some ways, a decade of change has turned the tables on the 905 region.
While Toronto taxes now rise grudgingly by 3 per cent, property taxes are shooting up in the assessment-rich subdivisions east, west and north of the city.
This year the hike was 3.9 per cent in Peel and Halton, 6.3 per cent in York. Next year it will be more of the same.
"A lot of growth expenditures are now coming to roost," says Toronto's treasurer Joe Pennachetti, who's held the same job in Durham, York and Peel regions. "Assessment growth is not quite as big as it was before to offset some of the costs."
The result is fears of double-digit increases in some regions, unmet costs for new roads, transit, police and sewers, and the slowing of the revenue train called unbridled development.
This was predicted. It has been monitored for decades. Still, the prospect of perennial hikes in property taxes and user fees has municipal leaders scrambling.
"No matter how you try to slash, it's no longer possible to balance the budget," says Durham Region Councillor Maurice Brenner of Pickering. "I see it as urgent and a crisis."
So much so, Brenner is urging his fellow GTA politicians to convene a summit with provincial and federal representatives to "figure a way out of this mess." Among the problems:
Faced with budgets that could add as much as $550 to Durham residents' average water and property-tax bill next year, the region east of Toronto is studying, among other things, whether to sell off two of its three nursing homes.
York Region increased taxes at least twice Toronto's 3 per cent, with huge sums for police and a growing transit system.
Transit fares will likely be frozen in Toronto again this year. In Mississauga and elsewhere, they are going up. Annual increases on a senior's pass on Mississauga transit will double in the next four years, prompting a helpless Mayor Hazel McCallion to tell a senior protesting the hike last week:
"Hazel can't help you this time."
Hazel "can't help?" The mayor who presided over a decade of no tax increases between 1991 and 2001? Can't help? What gives?
"It's serious, really," McCallion says of the fiscal crunch municipalities face. "I'm not sure the other levels of government recognize it."
For one, Toronto's sister cities are growing up - and with their new, older, more urban status comes the cost of growing pains. These include demands for service, sewers, roads, transit, social services.
Two, growth costs are rising faster than fees and levies from development. In some cases, like Mississauga, the infrastructure costs are rising even as revenue from growth declines.
For example, property taxes paid for only 48 per cent of Mississauga's 1999 operating costs; development levies took care of the rest. Next year, taxes will pick up 63 per cent and development charges 37 per cent. It's a phase Toronto went through. It's Mississauga's turn now. And York Region will get there soon.
Three, emergency and social services costs - once paid for by the province - have been dumped on cities and towns and are busting their budgets. These include child care, housing, hostels, welfare payments - all items that most experts contend have no business on the property-tax bill.
It used to be that civic staff in the regions outside Toronto gloated about their efficiency and lean administration in back-handed swipes at the "spendaholics" in Toronto. Now both sides are drawn together in a shared fiscal crisis.
York Region CAO Mike Garrett chairs a group of senior bureaucrats from large municipalities in Ontario. "From Ottawa to Windsor, Thunder Bay to Niagara, the situation is the same. All municipalities are in difficulty, which suggests there is a systemic problem."
The amalgamation of six municipalities into one City of Toronto in 1998 forced the inner city to face the budget crisis earlier than the rest of the region. The province dumped all transit costs and housing on the city and chopped other grants. It became obvious, even to hard-line fiscal conservatives, that the city could not survive the burden.
To a lesser extent, smaller municipalities were also hit. Consequently, the campaign for a new deal from the senior government - which found its voice in Toronto - has gathered steam and now is a rallying cry across the province and the country.
The downloading of costs is the second hit from the province. After sailing along for years, municipalities had their grants cut, and welfare numbers skyrocketed in the late '80s and early '90s. The result was double-digit increases, as high as 20.6 per cent in York and 18.9 per cent in Peel in 1989. Just as municipalities began to recover, the 1998 download kicked in.
"The pressure and inequity of cost-shared programs (between the province and the cities) rears its head again and again," Garrett says. For example, when the province made the funding changes, the cost of providing ambulance service was supposed to be split 50/50. Instead, York picks up 70 per cent of the costs, Garrett says.
Municipalities bristle when they see the federal government post a surplus of more than $8 billion while they must do headstands to try to find savings where there aren't any. Every time Mayor David Miller cries for a new deal, his counterparts across the GTA sing the chorus to the new-deal tune.
"There's got to be sources of revenues available to us other than property taxes," McCallion says. "The property tax was never intended to cover what it does now, and it's getting worse all the time. If we don't get a sustainable source - and I don't mean gas tax, I mean a designated share of income tax, sales tax - we won't survive."
Imagine building the Yonge St. subway and the entire Toronto transit system with no guaranteed funding from the provincial government. That's what York Region faces as it tries to establish public transit as a viable alternative in a car-dominated region. "In some ways, Toronto was lucky," Garrett says. "When it built its transit system, the province paid 75 per cent of the capital costs and 50 per cent for operating. We're getting some, but nowhere near that.
"Our issue is, we need a new deal. The province talks about a systemic problem with its debt. We have a systemic problem with our financing. And it doesn't look good for the foreseeable future."
Almost unanimously, they say gas-tax revenues are only a first step. Much more is needed or few people will remember the days when tax increases were something that happened in Toronto, while residents of the outer suburbs, by comparison, enjoyed a free ride.
"We are debt-free," McCallion says. "But for how much longer, I don't know."
Royson James, Toronto Star
18 December 2004
Once upon a time, senior citizens rode the buses for free in Mississauga and residents could count on paying the same property taxes year after year. And in Markham, the mayor boasted about no tax increase for five, six, seven, eight ... years.
Toronto residents drooled in envy. How could this be possible right across the street in Peel, York or Durham?
Not any more. The regions around Toronto, just like the city core itself, are running out of luck and running low on cash. And in some ways, a decade of change has turned the tables on the 905 region.
While Toronto taxes now rise grudgingly by 3 per cent, property taxes are shooting up in the assessment-rich subdivisions east, west and north of the city.
This year the hike was 3.9 per cent in Peel and Halton, 6.3 per cent in York. Next year it will be more of the same.
"A lot of growth expenditures are now coming to roost," says Toronto's treasurer Joe Pennachetti, who's held the same job in Durham, York and Peel regions. "Assessment growth is not quite as big as it was before to offset some of the costs."
The result is fears of double-digit increases in some regions, unmet costs for new roads, transit, police and sewers, and the slowing of the revenue train called unbridled development.
This was predicted. It has been monitored for decades. Still, the prospect of perennial hikes in property taxes and user fees has municipal leaders scrambling.
"No matter how you try to slash, it's no longer possible to balance the budget," says Durham Region Councillor Maurice Brenner of Pickering. "I see it as urgent and a crisis."
So much so, Brenner is urging his fellow GTA politicians to convene a summit with provincial and federal representatives to "figure a way out of this mess." Among the problems:
Faced with budgets that could add as much as $550 to Durham residents' average water and property-tax bill next year, the region east of Toronto is studying, among other things, whether to sell off two of its three nursing homes.
York Region increased taxes at least twice Toronto's 3 per cent, with huge sums for police and a growing transit system.
Transit fares will likely be frozen in Toronto again this year. In Mississauga and elsewhere, they are going up. Annual increases on a senior's pass on Mississauga transit will double in the next four years, prompting a helpless Mayor Hazel McCallion to tell a senior protesting the hike last week:
"Hazel can't help you this time."
Hazel "can't help?" The mayor who presided over a decade of no tax increases between 1991 and 2001? Can't help? What gives?
"It's serious, really," McCallion says of the fiscal crunch municipalities face. "I'm not sure the other levels of government recognize it."
For one, Toronto's sister cities are growing up - and with their new, older, more urban status comes the cost of growing pains. These include demands for service, sewers, roads, transit, social services.
Two, growth costs are rising faster than fees and levies from development. In some cases, like Mississauga, the infrastructure costs are rising even as revenue from growth declines.
For example, property taxes paid for only 48 per cent of Mississauga's 1999 operating costs; development levies took care of the rest. Next year, taxes will pick up 63 per cent and development charges 37 per cent. It's a phase Toronto went through. It's Mississauga's turn now. And York Region will get there soon.
Three, emergency and social services costs - once paid for by the province - have been dumped on cities and towns and are busting their budgets. These include child care, housing, hostels, welfare payments - all items that most experts contend have no business on the property-tax bill.
It used to be that civic staff in the regions outside Toronto gloated about their efficiency and lean administration in back-handed swipes at the "spendaholics" in Toronto. Now both sides are drawn together in a shared fiscal crisis.
York Region CAO Mike Garrett chairs a group of senior bureaucrats from large municipalities in Ontario. "From Ottawa to Windsor, Thunder Bay to Niagara, the situation is the same. All municipalities are in difficulty, which suggests there is a systemic problem."
The amalgamation of six municipalities into one City of Toronto in 1998 forced the inner city to face the budget crisis earlier than the rest of the region. The province dumped all transit costs and housing on the city and chopped other grants. It became obvious, even to hard-line fiscal conservatives, that the city could not survive the burden.
To a lesser extent, smaller municipalities were also hit. Consequently, the campaign for a new deal from the senior government - which found its voice in Toronto - has gathered steam and now is a rallying cry across the province and the country.
The downloading of costs is the second hit from the province. After sailing along for years, municipalities had their grants cut, and welfare numbers skyrocketed in the late '80s and early '90s. The result was double-digit increases, as high as 20.6 per cent in York and 18.9 per cent in Peel in 1989. Just as municipalities began to recover, the 1998 download kicked in.
"The pressure and inequity of cost-shared programs (between the province and the cities) rears its head again and again," Garrett says. For example, when the province made the funding changes, the cost of providing ambulance service was supposed to be split 50/50. Instead, York picks up 70 per cent of the costs, Garrett says.
Municipalities bristle when they see the federal government post a surplus of more than $8 billion while they must do headstands to try to find savings where there aren't any. Every time Mayor David Miller cries for a new deal, his counterparts across the GTA sing the chorus to the new-deal tune.
"There's got to be sources of revenues available to us other than property taxes," McCallion says. "The property tax was never intended to cover what it does now, and it's getting worse all the time. If we don't get a sustainable source - and I don't mean gas tax, I mean a designated share of income tax, sales tax - we won't survive."
Imagine building the Yonge St. subway and the entire Toronto transit system with no guaranteed funding from the provincial government. That's what York Region faces as it tries to establish public transit as a viable alternative in a car-dominated region. "In some ways, Toronto was lucky," Garrett says. "When it built its transit system, the province paid 75 per cent of the capital costs and 50 per cent for operating. We're getting some, but nowhere near that.
"Our issue is, we need a new deal. The province talks about a systemic problem with its debt. We have a systemic problem with our financing. And it doesn't look good for the foreseeable future."
Almost unanimously, they say gas-tax revenues are only a first step. Much more is needed or few people will remember the days when tax increases were something that happened in Toronto, while residents of the outer suburbs, by comparison, enjoyed a free ride.
"We are debt-free," McCallion says. "But for how much longer, I don't know."