Star: T.O. debt balloons $497M in 2007

[AlvinofDiaspar]

From the Star:

T.O. debt balloons $497M in 2007
Housing, transit push long-term pain to $2.7B

Jul 03, 2008 04:30 AM
John Spears
city hall bureau

Toronto's debt continues to grow, largely because of the need for housing and transit projects, the city's 2007 financial statements show.

The city's net long-term debt increased by nearly half a billion dollars last year – $497 million, according to figures released yesterday. That brings the total long-term debt to $2.758 billion.

Yet Toronto maintains a high credit rating, a staff report notes, a sign of confidence among lenders that the city can repay its debt.

"The significant growth in debt has been driven mainly by the need to finance transit capital expenditures and additional debt issued by Toronto Community Housing Corp. to finance social housing projects," says the report, signed by chief financial officer Joe Pennachetti.

The city has a plan to improve its financial health that includes reining in business property tax hikes to attract more investment to the city; finding new revenue sources – such as the land-transfer and vehicle taxes approved last year – and pushing the province to take back more social services costs.

The city also passed a balanced budget earlier this year.

Meanwhile, the figures show the city is still being squeezed.

Over the past five years, Toronto's spending has increased by 6.67 per cent a year on average, while revenues have grown by only 5.6 per cent.

And while the city expects to balance its budget in 2008, overall spending exceeded revenue in 2007.

According to the statements, the city's consolidated spending last year was $9.369 billion, while revenue was $8.825 billion. That means the city spent $543 million more than it took in.

Income from property taxes has been especially sluggish, growing at an annual rate of just 3.5 per cent.

Reluctance to increase the burden on homeowners has forced the city to look for other sources of revenue. Besides the new taxes on vehicle registrations and home purchases, the city hopes to finance more operations from user fees such as hikes in TTC fares and water rates.

There was some good news:

An extra $200 million in transit funding from the Ontario government has helped the city.

The city also brought in $260 million more than budgeted last year from higher prices for recycled materials, more revenue from Exhibition Place and the Toronto Zoo, and a November transit fare hike.

http://www.thestar.com/News/GTA/article/453260

AoD

 

[Glen]

Over the past five years, Toronto's spending has increased by 6.67 per cent a year on average, while revenues have grown by only 5.6 per cent.

I would be interested to know where the revenue increases have come from. 2003-2006 property tax was increased by 3%, 3.8% in 2007. Property tax represents less than 50% of the cities revenue. User fees have changed insignificantly, so where did the extra income come from?

 

[lordmandeep]

extra taxes and more parking tickets ^^^^




Yes increase debt by half a billion dollars in a year.

Only a socialist would find that to be a good thing...

 

[Jonny5]

I would be interested to know where the revenue increases have come from. 2003-2006 property tax was increased by 3%, 3.8% in 2007. Property tax represents less than 50% of the cities revenue. User fees have changed insignificantly, so where did the extra income come from?

Well the property tax has rate increased by 3 and 3.8%, but the value of the properties it taxes also increased. That probably accounts for the bulk of the difference.

 

[doady]

extra taxes and more parking tickets ^^^^




Yes increase debt by half a billion dollars in a year.

Only a socialist would find that to be a good thing...

Are you try to start shit or something? Or do you just like to complain about "socialists" in every thread?

 

[Glen]

Well the property tax has rate increased by 3 and 3.8%, but the value of the properties it taxes also increased. That probably accounts for the bulk of the difference.

I don't think so. The increases are relative to the tax burden in dollars, not the mill rate.

 

[CDL.TO]

I don't think so. The increases are relative to the tax burden in dollars, not the mill rate.

Indeed. The actual tax rate has decreased since 1997.

 

[TrickyRicky]

^He might be but I would put it another way, how can the city be so incompetent and this not result in mass firings at city hall and loss of all confidence in the executive council by the citizens of the city?

 

[Edward Skira]

incompetent

Incompetent? It says the money was spent on housing and transit. Unless the money was in some way wasted what's incompetent about that?

 

[doady]

Should we also call Hazel McCallion a socialist because of Mississauga's deficit spending and increased taxes each year?

No one here - the "socialists" included - finds the current fiscal situtation of municipalities to be a "good thing". I think a lot of people here have called for the province and the federal government to share more their revenues with cities, especially in light of their budget suplusses each year.

LordMandeep, just search the old threads about David Miller's "New Deal for Cities" and McCallion's "Cities Now" - read them, and stop making such stupid comments.

 

[Blovertis]

Remember, the story says the city's debt has increased by $497m last year. Money for capital expenditures was borrowed last year. Generally, capital projects should not be financed through tax increases.

The question is whether we are actually seeing tangible evidence of this increase in capital spending. Of course, the St. Clair RoW is underway and there are a number of public housing projects onstream, but does that add up to half a billion per year?

 

[Chuck]

Public housing is a waste of taxpayer's dollars in its current form. Public housing should give users a chance to get their life in order, but instead it gives those lucky enough to get in the opportunity to slack off for the rest of their life. Impose a 5 year residency limit on all new and existing residents so that they can get back on their feet, then evict them. If even after 5 years you can't learn a trade, go to school, learn English, or save up some money, something is wrong with you, and there's no reason why tax payers should foot the bill.

Exception is the elderly and those who legitimately can't work due to a debilitating handicap.

 

[Prometheus The Supremo]

Public housing is a waste of taxpayer's dollars in its current form. Public housing should give users a chance to get their life in order, but instead it gives those lucky enough to get in the opportunity to slack off for the rest of their life. Impose a 5 year residency limit on all new and existing residents so that they can get back on their feet, then evict them. If even after 5 years you can't learn a trade, go to school, learn English, or save up some money, something is wrong with you, and there's no reason why tax payers should foot the bill.

Exception is the elderly and those who legitimately can't work due to a debilitating handicap.

you would not believe how many disabled wheelchaired folks can't find housing. i heard the waiting list is around 5 years.

 

[Felino]

Public housing is a waste of taxpayer's dollars in its current form. Public housing should give users a chance to get their life in order, but instead it gives those lucky enough to get in the opportunity to slack off for the rest of their life. Impose a 5 year residency limit on all new and existing residents so that they can get back on their feet, then evict them. If even after 5 years you can't learn a trade, go to school, learn English, or save up some money, something is wrong with you, and there's no reason why tax payers should foot the bill.

Exception is the elderly and those who legitimately can't work due to a debilitating handicap.

I've followed this forum for a while now, there's no room for anyone with differing opinions, unfortunately.

As a former resident of public housing, I can tell you that there is a ton of abuse going on in the system. For example, the buildings in Regent Park have numerous drug dealers and users living there. It's crazy what goes on in there.


Also, there are generations of families living in public housing. The young girls generally learn that if they have kids young, they can get welfare and slack. I know I'm going to be attacked for these comments, but take it from someone who grew up in both Regent Park and Alexandra Park, I know what I'm talking about.

This kind of abuse made headlines just last week only they decided to talk about the dealers that live in them and stayed away from the politically sensitive 'single moms'.

 

[billonlogan]

Also, there are generations of families living in public housing. The young girls generally learn that if they have kids young, they can get welfare and slack.

I know one family, three generations worth, who live in public housing. This is a way of life for them and they don't no better. The grandmother lives in one unit, her daughter lives in the unit below with 2 kids. The oldest grandaughter lives in unit down the hall with 2 young kids. None of them worked a single day of their life.