This presentation offers insight on how to balance Toronto's budget. Sheila Block, Director of Economic Analysis www.wellesleyinstitute.com Follow us on twitter @wellesleyWI

1. Countdown to Zero:
Balancing Toronto’s 2012 Budget
November 17, 2011
Sheila Block
Director 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
900
800
821
774
700
706
679
600
615
500 562
($ Millions)
400
300
200
100
0
2007 2008 2009 2010 2011 2012
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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 = $132 million in lost revenue
Not different
• City is obligated by law to balance its operating
budget
• Budget process is about eliminating the “operating
shortfall” - gap between next year’s expenditures
and this year’s revenues
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5. What are the Mayor’s solutions to
address the shortfall?
Service review program
• Core services review results:
o90% of City services are “core”
o8% of City services are “traditional”
10% across the board cuts
Other solutions?
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6. How have we handled the budget
shortfall before?
91 Prior year surplus
181 Funding from other levels of
37 government
Cost cutting measures
Increased municipal revenues
Reserve
134
Property taxes
*Figures are 2007-2011
135
Average
($ Millions) 98
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7. How can we get Toronto’s budget
shortfall to zero?
900
Measures that bring
774 the $774 million
800 shortfall down to zero:
Opening operating shortfall
700
Adjustment to salary and benefit cost increases
-100
600 Prior year surplus
($ Millions)
TTC fare increase
500
-181 Tax stabilization fund
400 -30
2 Year normal property tax increase
-88
300 Assessment growth
Municipal Land Transfer Tax growth
200 -136
-30 Other revenues
-25
100
-46 41 Cost reductions
0
-98 Remaining Shortfall
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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
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