Toronto cannot afford to grow

So thankfully it is not?

Looking at the figures reported on by the Toronto Star it shows that the city spends on average $ 8,282.00 per year per household. At the same time the city of Toronto's own budget background paper shows that it collects an average of $ 2,176 per household in property taxes. Based on the city average assessment of $ 369,300. The difference is covered by user fees, Provincial and Federal Grants, plus other income like rental fee and permit and TTC fees, etc.. Traditionally these extra fees provide the city with 28% of its revenue. So for every new household the city adds its expenditures must rise by an average of $ 8,282 to keep service levels the same. This means that for every new household (average 2.55 persons) the city finds itself with a shortfall of $3,787 per year ($8,282-$2,176-$2,318.96).

This means that between 2001 and 2006 when Toronto's population grew by 22,529 it needed an additional $33,457,773 per year by 2006 to cover the additional expenses of new residents.

While the current status quo has been achieved by having the non residential tax base pay much higher levels of taxes, using the reserve funds and additional monies from other levels of government, all these sources seem to have been tapped out.

The Province has little room and will to increase its transfers to Toronto, as it already gives the city more money than others in Ontario. Likewise the the Federal Government has indicated that it is not going to increase it funding in any way outside of one time capital projects. On top of all this the city has exhausted its ability to raid its reserves. Its cupboards are bare. Lastly the city cannot afford to increase its nonresidential taxes. They are already the highest in the country and North America. Any attempts to increase them will further erode assessment values and increase the number of business that have already left for more friendly environments. This leaves the city with one choice, the extra cost of adding new residents will have to be absorbed by existing residents as well.

The only saving grace here is that the city has missed its growth targets. If they city had grown by the projected amount of 131,966 it would be $195,982,448 worse off than it already is.

links:
http://www.thestar.com/printArticle/281270
http://www.toronto.ca/torontoplan/pdf/flash_sec3.pdf
http://www.toronto.ca/budget2007/pdf/op_bckgrd.pdf