countdown to zero: balancing toronto's budget
DESCRIPTION
This presentation offers insight on how to balance Toronto's budget. Sheila Block, Director of Economic Analysis www.wellesleyinstitute.com Follow us on twitter @wellesleyWITRANSCRIPT
Countdown to Zero: Balancing Toronto’s 2012 Budget
November 17, 2011
Sheila BlockDirector of Economic Analysis, Wellesley Institute
November 17, 2011
2
Countdown to Zero: Two Questions
• Is the City in a financial crisis?
• Are cutbacks to services and asset sales necessary to balance the budget?
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3
Opening budgetary pressures: 2007- 2012
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2007 2008 2009 2010 2011 20120
100
200
300
400
500
600
700
800
900
562615
679
821
706774
($ M
illio
ns)
4
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 = $132 million in lost revenue
Not different• City is obligated by law to balance its operating budget• Budget process is about eliminating the “operating
shortfall” - gap between next year’s expenditures and this year’s revenues
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5
What are the Mayor’s solutions to address the shortfall?
Service review program• Core services review results:
o90% of City services are “core” o8% of City services are “traditional”
10% across the board cuts
Other solutions?
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6
How have we handled the budget shortfall before?
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*Figures are 2007-2011 Average
181
135
98
134
37
91
Prior year surplus
Funding from other levels of government
Cost cutting measures
Increased municipal revenues
Reserve
Property taxes
($ Millions)
7
How can we get Toronto’s budget shortfall to zero?
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0
100
200
300
400
500
600
700
800
900
Opening operating shortfall
Adjustment to salary and benefit cost increases
Prior year surplus
TTC fare increase
Tax stabilization fund
2 Year normal property tax increase
Assessment growth
Municipal Land Transfer Tax growth
Other revenues
Cost reductions
Remaining Shortfall
($ M
illio
ns)
Measures that bring the $774 million shortfall down to zero:
774
41
-100
-181-30
-88
-136-30
-25-46
-98
8
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
budget
April 13, 2023 | www.wellesleyinstitute.com