Toronto residents should not expect a pain-free budget, either in terms of tax hikes or cost cuts, when the city's 2010 operating budget is first unveiled in mid-February, warns city budget chief Shelley Carroll.
"I'm not going to sugar-coat it; it will not be zero," she told ctvtoronto.ca shortly before Christmas, about the possibility of a property tax hike.
"People have to come to grips with the fact that if you want to maintain the standard of service and the city wants to grow by 100,000 people per year ... it's not free."
There are no shortcuts or easy answers, she said.
The TTC has already decided to hike fares for 2010. Those increases will take effect on Jan. 1.
The plan laid out by city manager Joe Pennachetti has city hall locking down on expenses for the next few years while keeping the base of services intact and property tax increases manageable, Carroll said.
"These next two years are crucial to that, that we have the discipline to create the room (to accommodate future growth)," she said.
The city is facing a shortfall of up to about $500 million in its budget as it prepares to ratchet up work on its operating budget. By law, Toronto and other Ontario cities cannot table deficit budgets.
"Every year, we've trimmed and trimmed and trimmed to keep the gap (deficit) in that range as opposed to having it triple and quadruple as we go along," Carroll said. "Each year, we find efficiencies, we say no to some new things."
But as the city grows, some divisions must also grow to maintain the level of service, she said. Carroll said the TTC and the Toronto Police Service are examples of this.
"So there's a number of places where it's hard to cut," she said. "This year, we're going to dig deeper."
Some reports indicate that the city wants to cut $343 million from its net operating budget in the next two years. The city spends about $3.4 billion in its operating budget each year, so the $343 million figure is equivalent to a 10 per cent cut.
In recent years, the city has turned to Queen's Park or Ottawa for ad hoc funding to close the gap, but both those levels of government have recession-induced budget woes of their own.
Some federal childcare funding is ending this coming year, so offsets have to be found, Carroll said, adding, "So it's not a fun process this year."
While the city divisions have been co-operative about finding ways to cut costs by five per cent, some of the "ABCs" -- agencies, boards and commissions -- haven't been as co-operative, she said.
"We're having challenges with all of those," Carroll said. "But I would like to stress that it's not unusual to be not anywhere near the target that's been set this early in the process."
The first request is usually a "wish list," she said. A board of management signs off on that, but then the proposal goes to the city budget committee. After review, the entity might be told they won't get the funding they requested. Negotiations proceed from that point.
Carroll noted that in the case of the Police Services Board, it is governed by the provincial Police Act. "We can't really tell them exactly what to do with each dollar. We can only tell them how many dollars we're going to give them," she said.
"But we review their budget, and say, 'Here's our proposal for where you get to the amount of money we're gong to give you.' So we're going through that process now, in great detail, with the Police Board's proposal and the TTC's," she said.
The best-case scenario is to have all these discussions wrapped up by Feb. 16, although some boards hold out, Carroll said. "I will be launching a balanced budget."
The final date in the process will be April 15, when council votes on whether or not to accept the budget.
This past April, the 2009 operating budget carried by a 27-18 vote, although the conservative Responsible Government Group came within four votes of getting some amendments passed.
Spending was up $588 million over the previous budget. It sent property taxes up by four per cent, or about $90 on a house valued at about $388,000.
Some user fees went up 3.7 per cent. The city added more than 1,000 jobs.
"What people are getting is a significant increased investment in public transit and road repair, and they are seeing the needs of those hurt in the recession being met in better ways," Mayor David Miller said in defence of the 2009 budget.
