IN RECENT WEEKS, the Toronto dailies have had story upon story about the budget crisis supposedly being faced by the city, a crisis we see as largely the result of politicians being unwilling the face realities.

In this case, one reality is that in at least the last decade, Toronto politicians have been unwilling to raise the local tax levy to anything approaching the levies outside the city.

As a result, properties in Dufferin, as well as the '905' portion of the Greater Toronto Area, are paying far higher property taxes, and all too often for vastly fewer municipal services.

In Toronto, Mayor David Miller has thus far been stymied in his bid to use new taxing powers given the city by the McGuinty Liberals. Faced with a critical city council vote next month on plans to impose those taxes, the mayor now says he wants Torontonians to mobilize in favour of his scheme and pressure elected politicians.

Asserting that he knows what Torontonians really want, he said they want "a city that's a very good place to raise a family; they want a city that takes its rightful place in the world, one that's prosperous, where people can work and has decent public services," adding: "Unfortunately, you can't have public services without paying for them."

Faced with a multi-million-dollar shortfall for the city's 2008 budget, city staff had proposed a new land transfer tax and a vehicle registration tax that would have raised $356 million. But council surprised the mayor in July by voting to defer the tax debate until after the provincial election Oct. 10. That led to a call for "cost containment" measures that will see community centres closed on Mondays starting in two weeks, and some libraries closed on Sundays as of this week. On top of that, the Toronto Transit Commission decided it will have to raise fares in November.

The supposed crisis has led the Toronto media generally, and the Toronto Star in particular, to call for "a new deal for the cities," when in reality the need is for something more far-reaching, namely a new deal for all Ontario's property owners.

Thanks in large part to the downloading required by Mike Harris's Common Sense Revolution, property taxes in Ontario have been soaring while municipal infrastructures have been crumbling.

The downloading has had an uneven impact, with some municipalities having to pay much more than others for social services, highways and other amenities formerly financed by the province.

As one small example, the downloading of highways saw property owners in Dufferin saddled with the costs of maintaining about 40 miles of former provincial highways 9, 24 and 25 while 2.5 million Torontonians were left with just the costs related to five miles of the former Queen Elizabeth Way between Highway 427 and the Humber River.

In recent years, the federal and provincial governments have helped the municipalities a little, initially by giving them a tiny share of the federal gasoline tax revenues and latterly by "uploading" some of the social services deposited on them by the Harris Conservatives. However, such help has clearly fit the label, "too little, too late."

We suspect that most of our readers aren't aware of all aspects of the downloading.

One small aspect of it that raised some eyebrows at last week's council meeting in the Town of Mono was the elimination of a longstanding provincial program that recognized the value to all Ontarians of having a healthy farm economy.

Under the program that existed before the CSR, rural municipalities were able to levy taxes on farm properties at their full assessed value, and the farmers could then apply to the province for rebates equal to 75 per cent of the tax.

Instead, the Harris government required the municipalities to charge the farmers only 25 per cent of the tax, leaving other property owners to pay the 75 per cent that previously came from the provincial treasury.

The absurd result was that in a hypothetical township where all properties were farms, all the farmers were left having to shoulder all the expenses previously paid for by the Province!

Advised that the McGuinty government has only partially rectified the situation, Mono Council has ordered the town's clerk/CAO to send the premier a "strong letter" calling for a return to the farm/forest rebate scheme.

To us, an unsatisfactory aspect of the current provincial election campaign is the debate over the misnamed "health premium" imposed by the Liberals despite an election promise not to introduce any new taxes.

Without a doubt, this "premium" is really a form of income tax which has produced upwards of $3 billion a year in revenue that was clearly needed to implement promises in the areas of health care and education.

Recognizing the unpopularity of taxes generally and the health tax in particular, Progressive Conservative leader John Tory has promised to rescind it while somehow maintaining all existing provincial services and funding all faith-based schools.

NDP leader Howard Hampton is also talking of scrapping the tax, at least for everyone with modest incomes, while Mr. McGuinty simply concedes that the tax is necessary.

Well, unpopular as the tax is, it is at least a lot fairer and more equitable than the property tax, which all too often bears no relationship to the property owner's ability to pay it.

After all, the income tax is at one time both the fairest and most loathed tax of all, and the Harris government's reduction of the income tax rates, while popular at the time, led to the over-all tax burden being shifted from incomes to properties.

As we see it, any real reform of our tax system should see property taxes being used solely for local services that truly benefit the property owner, among them water, sewers, streets, police, fire and local recreation facilities - not for things like arterial roads, ambulance services and farm grants.