Photo by Christopher Drost/Torontoist.
David Miller announced today that the City of Toronto has discovered, in its most up-to-date analysis of its finances, that its 2009 budget surplus is $100 million higher than previously calculated. This will enable the City to make adjustments to its operating budget and plans for the next two years, allowing it to lower property taxes, mitigate some previously announced user fees and service cuts, and set up a reserve fund that will be put towards the 2011 operating budget.
“I know that Torontonians share [the] vision of a prosperous, livable city where everyone has real opportunity, and they have supported the City—and me— in implementing that vision through two municipal elections and seven City budgets,” said Miller before announcing the surplus. “Those budgets are far more than just balance sheets. They are the blueprint we use to implement the many programs and services that keep this city livable, prosperous, and provide opportunity for every single resident of our city.”
Miller will be recommending, for 2010, that the residential property taxes go up 2.9% instead of the previously announced 4%, and that commercial property taxes go up less than 1%. Additionally, some of the user fees and service cuts that were recently announced will be rolled back (though Miller did not specify which at this morning’s press conference); however, the majority of the new surplus, about 75% of it, will go into a “Property Tax Stabilization Reserve Fund,” to be used to help balance the 2011 budget.
As for this newly discovered surplus, according to Miller it has come from cost containment, wage constraint on management and front line staff, higher than expected interest and investment earnings, higher than anticipated parking revenues, an increasing in supplementary taxes from new development and construction, and a reduction in property tax appeals.
With seven and a half months left in Miller’s term, the advisory sent out late yesterday afternoon informing the media of today’s announcement set off a fury of speculation, with everyone trying to figure out what Miller’s important news might be. Would he be seeking a third term as mayor after all? Resigning to take a prestigious appointment elsewhere? Was there a major new piece of funding coming Toronto’s way? The actual news was in some sense anti-climactic, lacking the dramatic punch of some of these other alternatives, but it was also a solid bit of good financial news in what has otherwise been a dire year. Miller was beaming after the announcement—something we haven’t seen him do in quite some time.