City budget may add 2% to tax bill

City budget may add 2% to tax bill:
Toronto City Council passed a $1.6-billion capital budget yesterday that could add 2% to next year’s property taxes.

Adopted by a vote of 34-10, the 2008 capital budget increases the city’s total debt from $2.43-billion this year to just over $2.6-billion next. That translates to an extra $41-million in debt-service charges.

‘The pencils haven’t been sharpened enough on this,’ Councillor Doug Holyday, the chairman of the audit committee, said. ‘One of these days we’re going to wake up and this [servicing the debt] is going to be the biggest item in our budget.’

The ballooning cost of servicing the debt — it is the second most-expensive item in the operating budget, after police — could contribute to a hike in residential property tax rates when council tackles the operating budget in the spring.

It would take a 2% hike in residential property taxes to bring in roughly $40-million, city staff say. Councillor Shelley Carroll, the budget chief, said she would prefer the municipal government not dig itself a deeper hole. But she said it was ‘absolutely necessary’ to take on new debt.

‘Would I like to be doing it a different way? Absolutely,’ she said.

Full story here.

Photo of Councillor Shelley Carroll by Tyler Anderson for National Post’

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(Via national post.)