Mississauga eyes 8-per-cent tax increase in proposed budget

Mississauga’s long-term business plan is calling for a host of ambitious city-building projects at the same time as revenues from new developments are tapering off, prompting city staff to float the possibility of an 8-per-cent tax increase in this year’s proposed budget.

While the talk in Toronto is of cutting bus routes and freezing property taxes, the city to the west is looking to increase public transit and build new bicycle lanes.

The contrast is something of a role-reversal for the GTA’s two largest municipalities. Mississauga was once alternately lauded and disparaged for what was seen as a simple, pragmatic approach to governance, avoiding tax increases but doing little to stitch its freeway-separated subdivisions into a greater civic whole.

Now that the city has almost exhausted the available land to expand on, the fees from developers that used to fill municipal coffers have dried up and planning has shifted inward.

By the end of 2012, a series of guideways and dedicated lanes will allow buses to travel the length of the city from east to west unimpeded by traffic. The city also wants to add more than 300 kilometres of bike lanes and trails.

The city foresaw its current situation, to some extent, in the 1990s, when it set aside budget surpluses to make up the shortfall when development charges tapered off. The money, however, is running out, and some politicians say they didn’t anticipate costs would rise so much.

Councillors, however, remain adamant they can improve services while keeping tax increases far below 8 per cent, and have begun examining the budget in detail.

“Every position staff is asking for, we’re scrutinizing and looking at if it’s something we need or if it’s something we can do without,” veteran councillor Pat Saito said.

The challenge, she said, is finding surgical cuts to make, as opposed to slashing and burning. For instance, council rejected a blanket hiring freeze in favour of a plan to hire new staff on contracts.

“Being a business person, I’m not going to just sit and take what comes through on the agenda,” said councillor Ron Starr, who is looking for more detailed breakdowns on where departments are spending money.

The city has also seen lively public input on the budget, much as it did with its city-building strategic plan. Many of the locals who pushed for an ambitious strategy for developing the city have also spoken out against large tax increases.

Dorothy Tomiuk of the citizens’ group Miranet suggests city hall consider going into debt –something it hasn’t done since the late 1970s – to find the money for its projects. She argues that, when times were better and the city froze taxes, it simply deferred the inevitable rise in costs. Now, it must take a long view and show how the year-to-year budget fits with its long-term goals.

“We want to see alignment between the budget and the strategic plan,” she said. “We don’t just want to see a budget that keeps the lights on.”

Other GTA municipalities, meanwhile, have watched Mississauga and taken note.

“We are very mindful of the fact that we will be facing, in the future, aging infrastructure that will need to be repaired or replaced,” said Vaughan mayor Maurizio Bevilacqua, whose city is socking away money in a reserve fund and undertaking a review of its services this year.

The new mayor has provided a list of questions councillors and staff must consider about each budget item, ranging from whether the city can partner with private business to deliver the service to whether there is enough money to fund it at all.

These efficiencies may help the city whittle down the 5.4-per-cent tax increase proposed in its operating budget, closer to the higher end of projected increases in the GTA this year. On the lower end, Brampton is eyeing an increase of a little more than 1 per cent and Markham’s budget chief said the town is likely to break its two-year run of frozen taxes with a modest increase.

In Mississauga, meanwhile, politicians are clear about the challenges ahead, facing them with some of the city’s well-known pragmatism.

“We are doing more with less, but at some point, you reach a saturation point of the efficiencies you can get,” councillor Saito said. “And we’ve pretty much reached that point.”

Mississauga’s budget committee is next scheduled to meet in early March.

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B.C. budget designed for ‘maximum flexibility’

Published Monday, Feb. 14, 2011 9:00PM ESTLast updated Monday, Feb. 14, 2011 10:50PM EST13 comments

The budget Finance Minister Colin Hansen introduces Tuesday comes with all the trappings of a real one – PowerPoint presentations, stacks of spending plans and a lockup of media and stakeholders to allow time to digest the news.

But Mr. Hansen’s budget will escape the usual weeks of detailed scrutiny and debate in the legislature this spring.

The Liberal leadership contest, now in its final two weeks, means that the government will swiftly bring in a supply bill to tide government over while the party sorts out who will be the province’s next premier. The New Democratic Party opposition has agreed to cut the session short – just four days this week – because it is in the midst of its own leadership race.

The next premier will likely want to put his or her own stamp on government with a new budget later this year.

“Probably,” said leadership hopeful Kevin Falcon. “I assume so,” echoed Christy Clark. George Abbott went a step further, saying he would aim for a fall budget only after the future of the harmonized sales tax has been determined in a referendum.

The main attraction of this budget likely will be the window it provides on the province’s economic state: The deficit for the year just ending will be smaller than predicted, thanks to a relatively robust economic recovery in 2010. Mr. Hansen will be cautious about the economy in 2011, with his forecast council predicting softer growth to come.

“There is still a fair amount of volatility,” Mr. Hansen said in a recent interview as he put the final touches on the budget that he must deliver by law on the second Tuesday of February. “There’s not as much fiscal room as we’d like there to be.”

On his desk was a recent CIBC World Markets forecast which notes that the rebound in the United States is especially good news for commodity-dependent B.C. That same report explains Mr. Hansen’s caution: The key indicators are all over the map; housing starts are forecast to drop, for example, even as consumer confidence improves.

Mr. Hansen said the budget he presents on Tuesday, designed to create “maximum flexibility” for the next premier and cabinet, could stand up for the year. It will be based on the status quo mapped out in the previous budget, which included ambitious targets to rein in cost increases in health care.

The single biggest uncertainty, however, is the fate of the HST. Outgoing Premier Gordon Campbell has promised a binding referendum to let voters decide if they want to keep the controversial tax.

The leadership candidates have proposed moving that vote up to June, and Elections BC is preparing for that likelihood.

Mr. Hansen said the HST cannot be untangled quickly, even if the public rejects it, but his ministry has been discussing a plan with Ottawa on how that might work.

The fiscal challenge is that Mr. Hansen has already collected $1-billion from Ottawa as part of the agreement to move to a single tax. Another $600-million is due to B.C. and is already counted as part of the formula that allows the Liberal government to promise to balance the budget by 2013.

De-harmonization of the provincial sales tax and the federal GST would make balancing the budget in two years a tough prospect. Last week, Ms. Clark said she would not institute any major new tax cuts or spending programs until the budget is balanced. Candidate Mike de Jong has also made eliminating the deficit a central plank in his platform.

Mr. Hansen said the budget could be balanced in 2013 even if the HST is axed – and B.C. is forced to return Ottawa’s cash incentive. But it wouldn’t be easy. The choices are to run more deficits, raise other taxes or impose major spending cuts. None is an easy option for a new premier facing an election in 2013.

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