For those who own their own home in Toronto, big or small, the proposed budget keeps your property taxes low, as Mayor John Tory promised.

But analysis of that plan released late last year says this budget unfairly burdens the city’s most disadvantaged and vulnerable residents — those who rely on transit, city-run recreation programs and social services.

The city’s most senior public servant, city manager Peter Wallace, has repeatedly outlined that the city’s current problem is its revenue, not its spending, and that with relatively low taxes the city is struggling to pay for the services in place today, let alone the billions of dollars needed for unfunded projects.

Even though the preliminary operating budget proposed by staff does not include any new money for increased services, a $91-million budget gap remains.

The budget has been presented to council with a series of choices and stated risks — what to fund, what to cut and new strategies to close the gap. The process to make those decisions resumed last week, and the budget will be finalized in February.

Here’s how it breaks down:

What do we fund?

The city has an operating budget that pays for day-to-day services like child care, policing and garbage collection and a capital budget, planned over 10 years, that funds infrastructure like light-rail transit and road maintenance.

Next year’s preliminary operating budget is $12.25 billion.

More than a third of that operating budget pays for emergency services like the police ($1.13 billion) and the TTC ($1.95 billion). The largest chunk on the average residential tax bill — $700.95 — goes to policing.

The budget for capital spending over the next 10 years currently totals $26.5 billion, which includes the addition of a single subway stop in Scarborough (now estimated at more than $3.2 billion) and could include Tory’s plan to build six new GO stations at a cost of at least $2 billion to the city.

Council has also approved but has no way to fund an additional $33 billion in projects, including rebuilding the Gardiner Expressway East, currently estimated at $1.4 billion. Wallace, the city manager, has often compared those unfunded projects to an iceberg that threatens to sink the city.

How does the city pay for all these things?

The city splits the operating budget into two categories. The rate-supported budget deals exclusively with water, garbage collection and other waste management, and Green P parking. Those budgets are almost entirely funded by the user — homeowners, businesses and drivers.

Then there is the tax-supported budget which is primarily funded through property taxes and some user fees, such as TTC fares. The preliminary budget for 2017 presented by staff assumes property taxes will increase by 2 per cent next year, at the rate of inflation. Tory has insisted property taxes should not increase any higher.

That 2 per cent does not include a 0.5 per cent property-tax levy that is dedicated for capital transit and housing projects, and which will go to Tory’s proposed “city-building” fund for that purpose starting in 2017. That levy will increase to a total 2.5 per cent in 2021.

So, don’t we pay a lot in property taxes?

Not compared to other municipalities. Toronto, Canada’s largest city, has the lowest residential property tax rates in Ontario.

Residential property taxes are collected based on the assessed value of a home, meaning someone living in a $15-million mansion on the Bridle Path pays more in property taxes than someone in a $400,000 condo.

Despite the rise in real estate prices, Toronto’s tax rates have decreased overall between 1998 and 2016, from 0.8 per cent of the assessed value of a property to less than 0.5 per cent, according to city data.

“As a result, while homeowners have become wealthier since amalgamation, the city is taxing them for a diminishing share of that wealth,” Wallace, the city manager, reported.

While Toronto’s residential property tax rate was 0.72 per cent of assessed home values in 2015, the average across the GTHA and Ottawa was 1.07 per cent.

With a 2 per cent property tax increase proposed in this budget, the average homeowner — that is, with a house or condo assessed at $587,471 — would pay $55 extra next year, or a total of $2,841.

The city could actually plug its $91-million budget gap, reverse proposed cuts and pay for all the new initiatives planned if the average homeowner contributed an additional $140 next year.

Some on council, including Tory, have said many citizens can’t afford anything but a modest tax increase and that seniors, and others on fixed incomes, would be pushed out of their homes by anything more.

The city does have programs in place for vulnerable residents who might be overly burdened by property-tax increases, including a deferral program that allows qualifying seniors and people with disabilities to put off paying any increase until their home is sold.

It should be noted that when closing on the purchase of a new property, Toronto homeowners pay a significant levy on property through the Municipal Land Transfer Tax, in addition to a provincial land transfer tax. Wallace has noted this is also a tax on property and equivalent to a property tax of more than 20 per cent (which is only paid once).

This budget relies heavily on that revenue, predicted at $633 million for 2017, which assumes the real estate market in Toronto will continue at exactly the same pace next year as in 2016. Any softening would mean millions in lost revenue for the city.

So, how is the city able to pay for things?

While property taxes have remained low, the city has continued to raise various user fees charged by the city for services. Arguably, raising user fees at a higher rate than property taxes disproportionately burdens middle- and low-income residents who rely on those services.

Under Tory, all user fees and fines (not including TTC fares) have gone from financing 5 per cent ($463 million) of the budget in 2015 to 8 per cent ($795 million) proposed in 2017.

In 2017, the proposed budget would see user fees for some city recreation programs increase again, adding a 10 per cent increase on top of the 2.3 per cent inflationary increase for instructional programs, including sports and fitness for children and youth. For example, nine hours of child and youth fitness cost $20.20 in 2016. In this budget it would cost $22.73.

The city saw 85,000 registrations for those types of programs last year. Staff say the fee increase would bring those types of program in line with other instructional programs.

At the same time, TTC fares are set to increase for the sixth straight year, beyond the rate of inflation. Included in the 2017 budget is a 10 cent increase on all non-cash single fares. For example, tokens will climb from $2.90 to $3.00, representing a 3.4 per cent increase.

Meanwhile, the TTC — which faced problems of inadequate air-conditioning on subways this summer — remains the most poorly subsidized transit system in North America, at just 90 cents per rider funded from the property tax base in 2015.

To balance the budget and pay for ongoing services next year, the city will also draw substantially on reserve funds — some of which are meant as “rainy day” accounts, like having an emergency savings account for when your refrigerator breaks down. Draws from reserve funds — funds which see contributions from the operating budget over the years, and from other sources like development charges when building permits are approved — are proposed to total $450 million in 2017.

The rest? Council just backed several new taxes and fees, many of which require provincial permission first. The measures backed by Tory could raise an estimated $96.8 million in 2017, staff estimate — enough to cover the proposed gap and fund some new initiatives. Council also endorsed looking at road tolls to raise the needed capital funds, but tolls would not be fully implemented until 2024 and would not be nearly enough to cover the $33-billion iceberg.

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What gets cut?

In order to balance the budget, Tory requested all divisions and agencies find 2.6 per cent in budget cuts. Several cuts affecting service have been assumed in this preliminary budget, which council can either accept or reject. But removing any of the cuts below means the $91-million gap grows:

Arts and culture funding: This budget proposes reducing the amount of operational funding to agencies granted by the city. Total cut: $131,000

Community grants: This budget would see grant funding flatline, not even increasing to cover inflationary costs. Staff say city-funding organizations “may have difficulty maintaining service levels.” Programs funded by the city through the Community Partnership and Investment Program have included the Boys’ and Girls’ Club, the Lesbian Gay Bi Trans Youth Line support phone service. Total cut: $382,000

Cooling centres: After the city offered seven facilities during summer months to help vulnerable residents, the proposed budget recommends cutting that program. Staffers say use by vulnerable residents was low. Total cut: $30,400

In-school daycares: The city also plans to cancel an agreement with four school boards, starting July, that sees the city funding 350 child-care centres in public schools. That will see fees for parents increase by $1.35 per day or $351 per year per child. It will not affect low-income parents receiving subsidies from the city. Savings: $1.13 million

Parks maintenance: The city put money toward improving upkeep and horticultural improvements for parks in 2016; that would be reversed in 2017. That money included regular “rejuvenation” for 22 gardens and enhanced maintenance for 60 additional gardens. It also included evening and weekend park monitoring and maintenance in summer months when park use is at its highest. Savings: $639,700

Recreation discounts: While the fees for all recreation programs would increase by at least the cost of inflation, some much more than that, the available funding to families who qualify for what’s called a Welcome Policy subsidy will not even increase by inflation, meaning while programs cost more, the subsidy amounts will stay the same. Staffers believe the current amount will cover demand. Total cut: $556,000

Staffing: There are 426 full-time staff positions cut in this budget, many of which are currently unfilled. It will include several layoffs with a range of possible service impacts that are not clearly defined. Total cut: Unknown

What could be cut?

In order to meet the request 2.6 per cent budget reductions, staff submitted suggested cuts which have been spared by this budget. But city staffers have presented a menu of possible cuts as one way council could balance the budget:

Fire crews/trucks: Staffers say seven trucks and crews could be eliminated but it would mean performance would fall below the city's current standard: responding within six minutes and 20 seconds, 81 per cent of the time. The loss of trucks would see the service failing to meet that standard for an additional 3,081 incidents. Total savings: $15.35 million

Meals on Wheels: Council could choose to cancel food production for Meals on Wheels, which would cut 2,000 meals per week for seniors living at home. The meals are distributed through five agencies, with a net cost to the city of 88 cents per meal. Total savings: $792,500

Swimming pools: The city could close some 48 outdoor and wading pools and cancel programs at 10 indoor pools at Toronto District School Board locations, which would significantly reduce the amount of aquatic programs and city recreation facilities. Total savings: $2.73 million

Social housing improvements: Staff proposed that the city could reverse funding for recommendations from the mayor’s task force to improve quality of life for tenants living in social housing. Total savings: $4.17 million

Winter maintenance of sidewalks, bike lanes, bus stops: Enhanced maintenance of pedestrian and cyclist areas during winter months could be cut from the budget. Total savings: $3 million

What’s currently unfunded?

There is a total of $14.58 million in programs or targets approved by council that are not currently funded in this budget. These are some of them:

Additional child care spaces: A plan to fund an additional 75 child-care subsidies is not in this budget. And as proposed, the budget would only fund the exact same number of child care subsidies for low-income families in 2017. That’s only enough to help 29.7 per cent of Toronto’s low-income children under 12 years old. Staffers say there are currently 17,000 children on the waiting list for subsidies. Funding needed: $750,000

Additional city planners: Faced with an unprecedented number of development applications for new condominiums and other necessary studies, the city planning department has been hard-pressed to keep up with the workload. The budget proposes to keep the number of staff flat. Funding needed: Unknown

Increased library hours: More funding is needed to expand the number of library branches open on Sunday, which proved popular in 2016. The money would allow six library branches to be open an additional eight Sundays. Funding needed: $139,300

Immunization for students: The city is not meeting provincial requirements to assess and maintain records of the immunization status of every student in Toronto. The requirement is meant to ensure they’ve been vaccinated against nine diseases. More money is needed for Toronto Public Health for the appropriate staffing. Funding needed: $600,000

Ways to get involved

The public can register to speak at upcoming budget committee meetings during the debate of the operating and capital budget by emailing buc@toronto.ca . The meetings will be held at the following times and locations:

January 5 at 3 p.m. and 6 p.m. at the Etobicoke Civic Centre (399 The West Mall) or the Scarborough Civic Centre (150 Borough Dr.);

January 9 at 3 p.m. and 6 p.m. at the North York Civic Centre (5100 Yonge St.) or the East York Civic Centre (850 Coxwell Ave.);

January 10 at 3 p.m. and 6 p.m. at the York Civic Centre (2700 Eglinton Ave. W.) or 9:30 a.m. and 6 p.m. at City Hall, Committee Room 1.

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