The Toronto Board of Trade stunned city politicians this morning by recommending a special 3 per cent property tax levy on top of increase being proposed to fix crumbling roads and pay for other overdue capital projects.
The proposed “property tax surcharge” should be imposed annually, starting this year, and run for five years, board of trade president Carole Wilding told council’s budget committee during public hearings on the proposed $8.2 billion operating budget for 2008.
The surcharge, which wouldn’t apply to business properties, would be in addition to the 3.75 per cent hike being considered by the city. If the board’s recommendation is adopted, the total increase would be 6.75 per cent.
However, the board hopes the city can limit its increase to 2 per cent rather than 3.75 per cent, she said.
The board normally appears at budget hearings to urge the city to cut its costs, but the infrastructure gap has become too large to ignore, she said.
Wilding reminded the committee that some suburban municipalities are looking at increases in the 7 to 9 per cent range.
The surcharge would cost the average homeowner about $60 and generate about $40 million annually. The road repair backlog alone has been estimated at $300 million and growing.
“What we’re recommending is the need to invest in infrastructure,” Wilding told the committee. “We absolutely can’t wait,” Wilding told the committee. “There’s a critical need.”
Wilding said the sinkhole that opened up Monday on Lake Shore Blvd. W. is just he kind of traffic-stopping breakdown that costs business big bucks.
“Whenever any particular major route gets shut down for any period of time, you can calculate the hundreds of thousands of dollars it costs business which ultimately costs the city,” Wilding told reporters after her presentation.
Committee members seemed taken aback by the board’s message.
“So you’re actually recommending a larger tax increase than we’re recommending?” asked Councillor Gord Perks.
“What we’re recommending is the need to invest in infrastructure,” Wilding replied. “We know that we see this backlog that’s going to rise over the next five years. This is something we need to move forward with.”
Business properties would be exempt from the surcharge because they already pay higher taxes, while residential taxes in Toronto are significantly lower than in the surrounding 905, she added.
