New Transit Funding Sources

[Adjei]

How deluded and masochistic we've become. It's true that some cities have road tolls, the same cities that have infrastructure like the Lincoln Tunnel or the Big Dig. What will you have to show for increasing the expense of your commutes in Toronto? There is no plan to use these tolls to pay for great infrastructure. This is over payment for mismanagement.

What is your point? Where the Lincoln Tunnel and Big Dig financed by tolls?

 

[agoraflaneur]

Question: will the tolls be two-way? i.e. leaving and coming into the city? If so, that blunts the argument about Torontonians leaving the city not paying their fair share (which they do anyway via property taxes, but I digress). If not, it should be both ways.

 

[TOareaFan]

From what I have read a 1% property tax increase only brings in around $25 million, so to replace the tolls it would have to be 6%.

that would suggest that Toronto only receives $250MM of residential taxes out of their total of $3.9B

EDIT ignore...bad math late at night

 

[AlvinofDiaspar]

that would suggest that Toronto only receives $250MM of residential taxes out of their total of $3.9B

Four: Property taxes do not grow with the economy

If income levels in Canada rise, the federal government will collect more income tax (all other things being equal). But if the total value of property in Toronto goes up, the municipal government doesn’t collect more in property tax. Again, that’s because the City starts with a total dollar amount it needs to raise, rather than with a taxation rate. Property tax isn’t a function of any economic activity—it’s manually set by the City, so to speak—and so it doesn’t grow even if property values do. And since property assessment changes are revenue neutral, the only way to increase revenue is to increase the property tax rate.

The City needs to raise more money each year because while its property tax revenue is fixed, its expenses are not. Inflation and contracted wage increases mean that the City’s annual spending will go up automatically, thereby outstripping revenue (even if it institutes no new services or programs).


Let’s say the City needs $1 billion in residential property tax revenue one year, and the average property tax bill is $1,000. The following year inflation is projected to be two per cent, which means that in order to purchase precisely the same goods and services (and not accounting for wage increases), the City needs to raise $1.02 billion. That would mean the average property tax bill goes up to $1,020.


This is generally described as a two per cent property tax hike, and causes some politicians to get very shout-y. That’s a confused description, though—sort of like you misinterpreting a cost-of-living increase in your salary as an actual raise. The number of dollars you bring home goes up, but your relative place in the economy, your salary’s purchasing power, has stayed exactly the same.

http://torontoist.com/2015/12/how-property-taxes-work/

This also gives you an idea:

https://www1.toronto.ca/wps/portal/...nnel=e52b285441f71410VgnVCM10000071d60f89RCRD

Residential tax levy makes up close to half of the property tax of 4B.

AoD

 

[TOareaFan]

See above scenario - other areas of the city doesn't even have access to highways - should they be calling it unfair because they have no choice but to drive on regular roads? Besides, the principle is the same - unless you want to say that we aren't all Ontarians paying provincial taxes?

No I am saying the city is using its drivers to raise revenue for transit.....but only certain drivers.....drive on road A because it is the road that connects your home and your job you will pay extra for transit build....drive on road B for the same reason you won't.

 

[TOareaFan]

Four: Property taxes do not grow with the economy

If income levels in Canada rise, the federal government will collect more income tax (all other things being equal). But if the total value of property in Toronto goes up, the municipal government doesn’t collect more in property tax. Again, that’s because the City starts with a total dollar amount it needs to raise, rather than with a taxation rate. Property tax isn’t a function of any economic activity—it’s manually set by the City, so to speak—and so it doesn’t grow even if property values do. And since property assessment changes are revenue neutral, the only way to increase revenue is to increase the property tax rate.

The City needs to raise more money each year because while its property tax revenue is fixed, its expenses are not. Inflation and contracted wage increases mean that the City’s annual spending will go up automatically, thereby outstripping revenue (even if it institutes no new services or programs).


Let’s say the City needs $1 billion in residential property tax revenue one year, and the average property tax bill is $1,000. The following year inflation is projected to be two per cent, which means that in order to purchase precisely the same goods and services (and not accounting for wage increases), the City needs to raise $1.02 billion. That would mean the average property tax bill goes up to $1,020.


This is generally described as a two per cent property tax hike, and causes some politicians to get very shout-y. That’s a confused description, though—sort of like you misinterpreting a cost-of-living increase in your salary as an actual raise. The number of dollars you bring home goes up, but your relative place in the economy, your salary’s purchasing power, has stayed exactly the same.

http://torontoist.com/2015/12/how-property-taxes-work/

This also gives you an idea:

https://www1.toronto.ca/wps/portal/...nnel=e52b285441f71410VgnVCM10000071d60f89RCRD

AoD

But why would the Mayor state (repeatedly) that he will keep property taxes at or below inflation?....and then compound it by constantly yammering on about how the city needs money? It seems strange.

 

[44 North]

So is there any guarantee in place (or will there soon be) that the toll will be the reasonable $2-3 as promised? That's what makes them palatable and why they got through council IMO. It struck the right balance and why they'll work. Nobody really wants a tax/toll/fee/levy, but when it's reasonable it works. But is there any guarantee - possibly when the Prov signs the papers - that it will be that magic $2-3 toll rate?

 

[AlvinofDiaspar]

No I am saying the city is using its drivers to raise revenue for transit.....but only certain drivers.....drive on road A because it is the road that connects your home and your job you will pay extra for transit build....drive on road B for the same reason you won't.

One have the option of not using a certain route that is the highway - currently, access to a highway is not a right that is spread evenly across the city. Using it has always been a choice, and it will remain so post-tolling. You don't have to pay extra - you chose to pay extra. Let's not engineer your statement as if it is the only road that connects you home to your job. It's a limited access highway.

So is there any guarantee in place (or will there soon be) that the toll will be the reasonable $2-3 as promised? That's what makes them palatable and why they got through council IMO. It struck the right balance and why they'll work. Nobody really wants a tax/toll/fee/levy, but when it's reasonable it works. But is there any guarantee - possibly when the Prov signs the papers - that it will be that magic $2-3 toll rate?

I can't imagine council will have the appetite for anything more than that at this initial phase.

AoD

 

[agoraflaneur]

This says that a 2.17% increase will yield $58 million:

https://www.policyalternatives.ca/s...01/CCPA ON Toronto's Elephant in the Room.pdf

See top of page 3.

That is in line with what I recall reading in multiple articles.

 

[BurlOak]

So Toronto has 2M residences. 1% increase in taxes raises $25M, thus the total residential tax bill is $2.5B. This is an average tax bill of $1250 /yr.

 

[Midtown Urbanist]

From what I have read a 1% property tax increase only brings in around $25 million, so to replace the tolls it would have to be 6%.

Apparently city staff presented to councilors today that they would need a 10% property tax increase to match the revenue from tolls.

Unless I misunderstood something. (Only going off of what councilors have said - did not listent to city staff)

 

[denfromoakvillemilton]

Tory is moving this city forward. Good.

 

[tripwire]

Apparently city staff presented to councilors today that they would need a 10% property tax increase to match the revenue from tolls.

Unless I misunderstood something. (Only going off of what councilors have said - did not listent to city staff)

I'm pretty confused by this too. A 10% property tax increase is pretty big if implemented all at once, and so I'm surprised that it only equals the 2$ toll. I'm open to all sorts of revenue tools really, and am disappointed that tolls would take so long to implement.

 

[AlvinofDiaspar]

So Toronto has 2M residences. 1% increase in taxes raises $25M, thus the total residential tax bill is $2.5B. This is an average tax bill of $1250 /yr.

Those assumptions are questionable - we know the average is below other GTA municipalities, but not that low:

https://www.thestar.com/news/city_h...es_listen_up_toronto_youre_getting_a_deal.htm

But that's for homeowners - Matt Elliott also looked at residential levy in general:

http://fordfortoronto.mattelliott.c...to-budget-explained-with-three-simple-charts/

AoD

 

[Euphoria]

Exactly, these tolls are about funding Gardiner East. What a wasteful project with a lousy outcome for the city.