As the executive committee applied final tweaks to 2008’s budget, my mind wandered to vases.
The flatlands of fiscal discussion furnish much wandering room, but I was thinking specifically of the optical illusion that can either appear to be a vase or two faces in profile, depending on how you perceive the fore- and background.
So, too, executive councillors knew how much property tax revenue they stood to generate – $67 million – but spent much time discussing, on Tuesday, March 25, how much they should say taxes would increase – by 3.75 per cent or 2.3 per cent. In other words, they were making an excursion into the terrain of perception.
The issue was all about how to present – you could say spin – the fact that while small business and industrial properties will see tax reductions this year of 1.29 and 1.01 per cent respectively, residential property taxes will jump 3.75 per cent, while tenant and commercial property taxes will go up by 1.48 per cent.
This is the first step in a policy of shifting the tax burden off business and onto residences. It obviously serves as peace offering to the Board of Trade, et al., but councillors also say it’s long been needed.
Enid Slack, municipal economist at U of T’s Munk Centre, confirms in a phone conversation that commercial enterprises are overtaxed relative to other properties and other GTA businesses.
“If you’re a business,” she says, “and you’re looking at Toronto versus Buffalo, a lot of factors are going to come up before property tax, like access to skilled labour or whether your site is close to airports. Once you’re looking at the GTA, where you locate will be influenced by property tax.”
I cringe at her other points. “In terms of efficiency,” she says, “you should tax the least mobile capital more than the most mobile capital.” The primacy of global capital. “Cater to us or we’re going home. And by ‘home,’ we just mean somewhere else.”
So back to the question of how to sell the hike: is it 3.75 per cent? Or, as Joe Mihevc suggested, 2.3 per cent, the average of the residential, apartment and commercial increases? Semantics? Maybe. Dedicated naysayer Denzil Minnan-Wong objected that the mayor’s executive was simply trying to “massage and manipulate” a residential tax increase – which, actually, they were. You might wonder why; T.O. has some of the lowest property tax rates in the region.
While we’re on the subject of optics, maybe that earlier revenue figure – $67 million – can be improved on. Try $1.267 billion: taxes plus total user fees. This would be more accurate, but also more sensational. Let’s compromise with $84 million – property tax revenues plus the $17 million in user fee increases.
We’re told road tolls would hurt the poor, but apparently the same argument doesn’t apply to rec centres. The difference? Motorists could turn an election.
And how can you (rightly) justify garbage fees as a way to discourage waste but not then ask whether rec fees are discouraging recreation?
Predictably, the mayor’s opponents pounced. Karen Stintz argued that all council has done “is make it harder for people to live here.” But then, those who object to the fees are also the ones who’ve done their damndest to stop rational taxing.
See also: Rob Ford apologizing in Council.