Thursday, December 31, 2009

Bad math: Toronto giveth, but Toronto taketh more away

Some recent events leave me more befuddled than ever at the state of affairs in our fair City of Toronto, and wondering more than ever if intelligent leadership may emerge in time for next year's municipal election. Heck, I may actually have to pay attention to local politics for a change.

A few weeks ago I arrived home to my Scarborough apartment to find a letter addressed to "current tenant" from the City of Toronto. Great news, the letter and accompanying brochures and backgrounder heralded: my rent is being reduced!

Yes, the city elders have seen fit to lower property taxes in Toronto the good. As an apartment renter, of course, I don't pay property taxes directly: they're part of my rent, and are paid by thge property owner. By law, though, when property taxes are decreased by 2.49% or more, I get an automatic rent decrease.

How much, you ask? Why starting December 31, 2009, I can reduce my rent by a whopping 0.55%! For me, that amounts to a reduction of $4.34/month. Or, for the year, $52.08. Not much but hey, better than nothing right?

Then a few days later I went to buy my January Metropass, because the TTC is how I commute between my office and my luxury pad in Scarberia. And, as reported earlier, the TTC has raised prices. A lot. So the Metropass that cost me $109 in December cost me $121 for January. An increase of $12/month. Or $144 for the year.

So when you net out my property-tax driven rent decrease with my Toronto's massive funding shortfall-driven TTC fair increase, I'm in the hole by $7.66/month, or $91.92 over the year. And since I don't have the pleasure of working for the city I don't get an automatic pay increase that will cover it. Actually, we all took pay cuts this year due to the economy.

So thanks for nothing, City of Toronto. And by the way, why would you cut property taxes AND jack-up TTC fares? Obviously the city has money troubles, that was your justification for the fare increases. But then why would you cut property taxes?

I thought David Miller was supposed to be some kind of socialist or something. I didn't major in poly sci, so perhaps the nuance escapes me. But the logic of cutting property taxes, which will disproportionately benefit wealthy property owners (who probably don't take the TTC, I'd bet) while jacking-up TTC fares, which disproportionately hurts the less wealthy that can't afford to drive (and probably aren't big property owners) escapes me. It seems more like Reganesque trickle-down economic theory than anything else.

Are there any adults left at city hall?

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6 comments:

Dan F said...

The city did not cut (or raise) property taxes.

Property taxes are set as a % of the value of a property. If the value of the property decreases, then your rent also decreases. Linking this to the TTC fare increase is disingenuous at best.

Also, blaming city hall for the lack of provincial and federal funding to public transit doesn't really make sense. How many other transit systems have to survive solely on the farebox and property taxes? Especially when many TTC riders are not even residents of Toronto, so the city is unable to collect taxes from them.

MississaugaPeter said...

Jeff,

Of course property taxes went down and transit fares/passes went up.

Even socialists on council know that the rich vote and contribute while the middle class and the poor don't do that much!

CanadianSense said...

Someone has to pay trip by Miller to pick up the Fossil Award.

JtheM said...

As someone with a long history as an elected official in municipal government, and even longer as a enthusiastic observer , this is how your proprty taxes are determined. After they determine how the tax burden will be split between the 3 tax classes, which generally are industrial business and residential,some municipalities have 5 classes They take the total value of the assesment in your tax class in the case of a home owner, residential. They then figure out what the fiscal requirements for that class will be. They divide the requirement by the total value in the class and come up with the mil rate, or rate per thousand dollars of value. This means in general, that the value of your home has no impact on your tax rate, as they can just up the mil rate. This is done because the cost of services never follows the value of realestate. It also mitigates rates frpm the highs and lows in volatile markets. This is the method in BC and Ontario both places I have lived. Therefore Jeff any rate change is a conscious decision of the Local Government of the day.
To continue, one must remember that, sewer and water are based on cost recovery, and are billed out, in general at a flat rate per residence, or unit in that class. The reason your transit pass increased, and the property taxes decreased probably goes something like this; The residential class quite often subsidzes the needs of transit, especially in larger centers. The Councill in your area likely made a conscious decision based on a recommendation from staff to reduce this subsidy. Shazam lower property taxes, increased transit fees. These adjustments go on all the time, depending on the view of the sitting Councill. There is also a possibility that your municipality has received decreased level of funding from a higher level of government or ridership has dropped.
Local government is by far the most interesting level of government Jeff, but be prepared, it is true blood sport, no holds barred. Makes Federal politics look like, school yard recess antics, compared to UFC.

Greg said...

Ok, then what do you think of lowering income taxes but introducing the HST? Maybe you can turn this into a series?

Lexy said...

Unfortunatley, MississaugaPeter is wrong. The poor are there to secure everyone else's lives. To ensure that there is a middle class; for without the poor to terrify them, why would they work?
But beware (As the people in BC now know) the gap is widening fast.