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Ford to balance books with no new taxes, no big service cuts

Toronto Mayor Rob Ford.

Fred Lum/Fred Lum/The Globe and Mail

Rob Ford's maiden budget recommends cutting late-night hours on some little-used bus routes, but the new mayor is expected to otherwise balance the books without ravaging services, raising taxes or reducing debt payments.

The budget Mr. Ford will unveil at 9 a.m. Monday suggests moving $7-million in service from "underperforming" bus routes to overcrowded ones, according to Karen Stintz, chair of the Toronto Transit Commission.

No routes would be killed outright, but some would run less frequently and stop early enough to strand riders who've come to depend on them since the TTC greatly expanded bus service two years ago.

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"These are all late-night and off-peak hours," Ms. Stintz said, adding the commission will hold a special meeting Wednesday to review the budget. "There are routes that just don't carry a lot of people."

Mr. Ford's opponents have been pressing him for weeks to explain how he'll make up Toronto's budget shortfall without "major" service cuts or a property-tax increase, leading to at least one report on the weekend that he'll stop paying off the principal on the debt.

"My understanding is that is incorrect," said Adrienne Batra, the mayor's press secretary. "The final say, of course, will be with the budget committee."

She said the draft budget does not recommend reducing scheduled capital-from-current payments - the money the municipal government siphons from its operating budget to help pay down its $3-billion capital debt.

The speculation stems in part from Mr. Ford's own election platform.

His finance plank, released Oct. 8, recommended reducing the capital-from-current contribution by $125-million in both 2011 and 2012, money he pledged to make up through asset sales.

Shelley Carroll, budget chief in David Miller's second term, said it would be a "mistake" for Mr. Ford to revert to his election-season stand.

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"Basically what you're doing is saying, 'I'm going to stop paying any principle on my loan payment,' and now you're borrowing to buy the groceries. That's a mistake."

If Mr. Ford isn't going to pay off less debt, raise property taxes or cut services deeply, how will he close the estimated $503-million gap in the 2011 operating budget? Especially considering he added $64-million to the shortfall by killing the vehicle-registration tax Jan. 1?

It is believed the surplus Mr. Miller left behind is even larger than expected, and that Mr. Ford will apply it all to the 2011 operating budget.

Mr. Miller and the last council banked $75-million of the 2009 surplus in a "property-tax stabilization reserve."

As of the end of the third quarter, the 2010 surplus sat at a whopping $282-million. The fourth-quarter figures haven't been made public yet, but if the trend continues, the 2009 reserve and the 2010 surplus combined could nearly plug the hole.

Although city staff drafted the 2011 budget, it is very much a creature of Mr. Ford and his political team.

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Mr. Ford cut the budget committee out of the loop. "Your guess about the budget is as good as mine," said Chin Lee, a member of the committee.

The mayor also demanded the budget timetable be compressed and that all four budgets - operating, capital, Toronto Water and Solid Waste Management - be presented on the same day.

The last two budgets are expected to recommend a 9-per-cent increase to water rates and a 3-per-cent increase to garbage rates.

Even Mike Del Grande, the new budget chief, was largely in the dark until last week.

"The job is the most thankless job in the whole city. The glory goes with the mayor and the faults go with the budget chair," he said.

Council is scheduled to vote on the final versions of all four budgets by the end of February.

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Kelly Grant is a health reporter with The Globe and Mail. More

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