This week, when asked about the prospect of raising taxes beyond the rate of inflation in coming years, John Tory called the idea “an admission of failure.”

This is distressing to hear. Consider the context: Tory’s current budget turns out to require a lot of dipsy-doodling that edges the city perilously close to its debt ceiling while hiking TTC fares and garbage fees. Meanwhile the unexpected bills keep rolling in: lookee here, Metrolinx just tossed another $95 million onto the city’s obligations! Whoah, lookee there, Toronto’s Union Station obligations just went up another $60 million because the province and feds are telling us to stuff our pleas for help. That’s without beginning to even ponder the 10-figure numbers involved in keeping the TTC and social housing in good enough shape that they can safely continue operating.

What Tory calls admitting failure, we might instead call “math.”

It’s difficult math to face up to, but it’s the result of more than a decade of childishly pretending we can avoid the calculations by thinking happy thoughts and wishing on the first star to the right.

It’s as simple as this: property taxes don’t rise with inflation. The city’s costs do rise with inflation. So a property tax rate increase “below the rate of inflation” is a tax cut. Successive city administrations have done that a lot since amalgamation in 1998, sometimes “freezing” rates and most often keeping increases below inflation. This means the city’s property tax rates have, in real dollars, dropped about 12.5 per cent since 1998.

The trouble this creates should not be hard to understand. In 1998, an average house in Toronto cost $216,000, I rented a one-bedroom apartment for $500 a month, and the minimum wage was $6.85 an hour. Inflation since then totals more than 36 per cent. If you were still earning now what you earned in 1998, you’d be in deep, deep trouble.

Now, the city did, in an uncharacteristically bold moment of acknowledging reality, implement a new tax, the Land Transfer Tax, revenue from which almost makes up the difference between the real-dollar property-tax cut and inflation. But the city has grown at the same time. The Toronto CMA has added a million people since amalgamation (that’s about the population of the city of Calgary); TTC ridership is up more than 40 per cent over that same period; the entire skyline has been transformed by vertical neighbourhoods that did not exist 15 years ago.

In addition to growing, the city has aged: the Gardiner Expressway is falling apart, the TTC’s SRT is at the end of its useful life, hundreds of Toronto Community Housing units are in such disrepair they will be uninhabitable in a year or two.

That is why we’re in crisis.

To deal with this, the city will need to either dramatically cut costs, or raise taxes.

John Tory hasn’t shown any inclination to make dramatic cuts in spending on services — in fact, in approaching the TTC and files such as homeless shelters, he’s indicated he’s looking to expand services. And he’s also promised ambitious investment in new service and infrastructure, particularly on the TTC. Which is all fine.

But if we don’t want to cut services, then where’s the money coming from?

Tory has spoken, like his predecessor, of finding more efficient ways to deliver services, which is hoped to provide the needed hundreds of billions of dollars. I do not believe this is possible, and neither does the city manager whom Tory begged to stay on for a few extra months to shepherd the current budget. Joe Pennachetti has consistently said that the city needs new revenue, and suggested a sales tax as an option worth considering.

Indeed, it is worth considering: property taxes are not a particularly fair way to collect money for social services or infrastructure investment. The land transfer tax, vital though it’s been to the bottom line, is a particularly punitive form of land tax levied only on those with the misfortune of needing to move. Income or sales taxes are worth discussing. In the absence of those, a property tax rate increase, catching us up to inflation and beyond, is the necessary, grown-up approach.

It’s the approach they have taken in the 905 region, where rates are already far higher than here, and they continue to take it — in Mississauga, for instance, where property taxes have been raised a cumulative 14.4 per cent over the past three years.

The federal and provincial governments have refused to rain money on us from their own tax revenue. The quest for “efficiencies” has been on a long time, but has never shown the potential to be a miracle cure for our revenue woes. The City of Toronto needs to raise more money, either through property taxes or new “revenue tools.”

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Maybe people don’t want to hear that. But telling it to them straight is not “admitting failure.” It’s owning up to reality, in the hopes of avoiding a civic failure that will follow if we continue to act like children who can’t handle basic math.

Edward Keenan writes on city issues ekeenan@thestar.ca . Follow: @thekeenanwire

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