Mayor Rob Ford cried foul after Toronto finance staff proposed a 2.5 per cent property tax hike in 2014 to cover inflation, some new services and the city’s share of the cost of the Scarborough subway.

The increase — equal to $64 on the average home assessed at $498,000 — is more than the 1.75 per cent that Mayor Rob Ford had held out as his maximum 11 months ago — before the plan to build the Scarborough subway added millions to the city’s requirements.

Ford was irate after finance officials launched the 2014 budget deliberations on a proposed operating budget of $9.6 billion, up from $9.4 billion last year.

Of the proposed 2.5 per cent tax hike, 1.4 per cent goes to inflation; 0.6 per cent to enhanced services; and 0.5 per cent to fund the subway, which also requires $745 million in borrowed funds.

In dollar terms, the subway championed by Ford makes up $13 of the $64 average tax increase.

Ford left the budget committee meeting, telling reporters he had been assured that the subway costs could be met within a 1.75 per cent tax increase. That would have been less than the 2 per cent increase approved for this year and the 2.5 per cent hike levied in 2012.

Ford claimed the bureaucracy has changed since the mayor’s powers were reduced by council last week.

“It’s so disappointing that in five days, as soon as they reduced my powers, all they’re doing is going back to the old tax-and-spend ways, getting back on the gravy train and spending and spending and spending and spending,” Ford said.

“It’s embarrassing that people of this city have to pay over 2.5 per cent in property taxes when we had it locked in at one and three-quarters. That is absolutely atrocious. And I will not be supporting this budget, I can guarantee it.”

Ford’s brother, Councillor Doug Ford, who acts as vice-chair of the budget committee, said he, too, will be voting against the budget.

Councillor Ford said the tax hike could be reduced to 1.75 per cent from 2.5 per cent by cutting spending by $18 million. He concluded that the “political will” to cut the budget has evaporated.

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Councillor Frank Di Giorgio, Ford’s handpicked budget chair, accused the mayor of “slightly over-reacting” in his criticism of the 2.5 per cent proposed hike.

“I think by and large, when the city’s residents look at the services that we provide and the increases that we’re looking for and the enhancements that we’re providing, I think most people will agree that the demands we’re making are reasonable,” Di Giorgio said.

Di Giorgio said he expects pressure not to decrease spending but increase it by adding to the $14 million in enhanced services that have been included in this year’s budget.

The city expects to increase staffing by 752 positions to bring the overall workforce to 49,482. Some 479 of the new positions are in the TTC, which plans to expand service by about 2 per cent in 2014 and carry 540 million riders during the year.

Some councillors “want to see more service enhancements over and above what are being proposed by staff,” he said. “I see the pressure, I think the committee has to hang tough …”

Councillor Gord Perks, a Ford critic, said the proposed tax hike is “in the right ball park.”

Ford said he believed the property tax increase could be set at 1.75 per cent and still cut land transfer tax revenues by 10 per cent, or about $35 million in 2014.

Ford said City Manager Joe Pennachetti gave him that assurance. However, asked in budget committee by Councillor Gord Perks if that was so, Pennachetti said no.

Di Giorgio said he expects to bring forward within two weeks a proposal to trim the land transfer tax, while conceding he doesn’t know if it will receive council’s support.

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In a subsequent briefing to media on the budget, Pennachetti said staff made no changes after city council stripped Ford of a variety of his powers, which were transferred to Deputy Mayor Norm Kelly.

“There was no impact as to what was happening with the mayor’s situation in council,” Pennachetti said. “We just plowed ahead with our budget. Absolutely categorical — no impact at all.”

Ford is no longer chair of the powerful executive committee, which was handed to Kelly. The executive will review the budget Jan. 22, followed by final council approval Jan. 29 and 30.

Kelly, who took over the executive committee chair and other powers removed from Ford, issued a statement recognizing Ford’s achievements during his first three years in office.

Kelly said the staff’s budget recommendations were crafted by “a very capable team” led by Pennachetti, Chief Financial Officer Rob Rossini and Financial Planning Director Josie La Vita.

The proposed budget goes to public hearings next month, will be reviewed by council’s executive committee Jan. 22, and go on to city council for final approval Jan. 29 and 30.

Budget facts

With files from Betsy Powell and Daniel Dale

Key numbers from the City of Toronto’s proposed 2014 operating budget.

Total operating budget 2014: $9.6 billion (2013, $9.4 billion)

Residential tax increase 2014: 2.5 per cent (2013, 2 per cent)

Total number of employees 2014: 49,482 (2013: 48,730)

Top three expenses in operating budget: Police; transit; debt repayment

Projected net city debt 2014: $3 billion (2018: $4.5 billion; 2023: $2.9 billion)

Lowest average 2013 property tax bill in GTA: Toronto, $3,274

Highest average 2013 property tax bill in GTA: King Township, $6,054

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