Monday, October 24, 2011

Budget Issues in Brief

Excerpted from the Fall 2011 Newsletter:

Budget Issues in Brief
I have outlined a few points below to help you understand the City's financial situation:

  • Each year the City's costs rise by $200 million, just to cover inflation and payroll costs
  • Each 1% increase in your property tax brings in $21 million in revenue for the City. To cover the above $200 million alone would require a 9.5% property tax increase.
  • Even if Council did not spend a single cent this year, our debt - caused by the previous mayor's spending - would climb from $2.5 billion to $4.3 billion.
  • By 2014, the annual cost to service this debt will rise from $430 million to $620 million.
  • Half of our $9.3 billion Operating Budget is comprised of wage costs (totaling $4.7 billion). We currently have 53,000 people on the City's payroll.
  • The City's Budget for 2012 has an opening shortfall of $774 million which is a significant amount. If we were to use tax increases alone to account for this, we would have to increase property taxes by 36.8%.
  • Unfortunately, businesses are moving out of the City of Toronto into the 905 areas (Markham, Mississauga, etc.) as it is cheaper for them to operate outside of the 416 area. This also puts pressure on our budget.

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