Fiscal discipline.

The term screams of denial, restriction, restraint, asceticism even.

So it plays easily into the language of those ideologically bent on cutting our way back to prosperity. Anti-government types who see any public sector spending as inherently wasteful. A discipline of living within our means by way of making due with less.

But what if we interpret fiscal discipline through another lens?

Not one that suggests some sort of punitive action but one that provides a ‘training expected to produce a specific character or pattern of behavior, especially training that produces moral or mental improvement.’ A discipline that teaches the value of our tax dollars spent rather than the simple cost to each of us individually? To train a larger community into seeing that paying less inexorably translates into doing with less. You get what you pay for, folks, and demanding city service levels be maintained (or even improved in the case of transit) while insisting on paying less is the exact opposite definition of ‘discipline’.

Self-indulgence, perhaps?

With Moody’s maintenance of Toronto’s Aa1 credit rating last week, Mayor Ford and his allies hailed their curtailing of expenditures as the kind of fiscal discipline the city needs, conveniently ignoring the fact it’s the same level rating we’ve had for 10 years now. Wait. You mean during the 7 years chief tax-and-spender David Miller was mayor we had an Aa1 credit rating? Doesn’t that give lie to the entire underpinning of Mayor Ford’s reality? That the city was an out-of-control financial train wreck waiting to happen? We’ve borne the brunt of unnecessary cuts owing to a hysteria generated by a misguided but successful municipal election campaign in 2010.

On their radio show yesterday, the mayor and his councillor-brother hosted the city’s budget chief, our own resident Droopy Dog, Mike Del Grande who bemoaned the fact our credit rating hadn’t been upgraded a step to AAA, the highest level Moody hands out. I mean, what’s a guy gotta do to get a AAA around here? How many widows and orphans do we have to ignore before we’re awarded best in class?

“We need firm discipline,” the budget chief said at an Executive Committee meeting last year. “I get a little concerned when we start making arguments about the widows and orphans. Negligibles add up. We cannot afford to do everything that everybody wants us to do…the 2011 budget is cupcakes. We tend to spoil everybody. We need to learn to say ‘no.’”

Yet, we read this from the Moody’s report: “Toronto’s rating relative to other Canadian municipalities reflects a low debt burden and high levels of liquidity, balanced by operating budget challenges typically not experienced elsewhere.”

Huh. Low debt burden and high levels of liquidity. So why is the solution to our operating budget challenges from Team Ford only consisting of saying ‘no’ to government spending and paying down an already low debt burden? Oh, right. Fiscal discipline as a form of abnegation. No cupcakes for you, widows and orphans!

If we want an improved credit rating, Moody’s offers a solution. “Continued fiscal discipline, including a permanent solution to the existing operating budget pressures, [bolding ours] along with a continued strengthening in financial position, could exert upward pressure on Toronto’s rating.”

That would be fiscal discipline with a caveat from Moody’s. To ‘exert upward pressure on Toronto’s rating’ (arguably a necessity at this particular time) the city needs to find ‘a permanent solution to the existing operating budget pressures – in itself a challenge ‘typically not experienced elsewhere’. According to city manager Joe Pennachetti in a talk at the Institute on Municipal Finance and Governance last week, there’s maybe $100 million more in efficiencies to be found which is roughly 1% of a $9 billion operating budget. In other words, we’ve about maxed out in the amount of cutting as a source of fiscal discipline we can do without unnecessarily harming our ability to deliver adequate services.

Now we must talk about generating revenue. It’s hard to believe that any credit rating agency would seriously consider an upgrade until we begin to show that type of fiscal discipline. A willingness to consider and implement new ways to pay for all the services and programs we say we want. Or, what the city manager referred to as city building.

As we ramp up to the 2013 budget debate, starting sometime next month, this should be the direction the conversation goes. The slash-and-burn disciplinarians have had their way, exploiting a faux crisis of their making, not only succeeding at hacking away at services and programs but eliminating vital sources of revenue the city needs to properly develop and grow healthily going forward. That is only one aspect of fiscal discipline and, as it turns out, the least effective.

“The [Moody’s] high investment-grade rating also reflects a large and diversified economy, which remains a source of credit strength, providing access to a broad tax base.”

How to fairly and efficiently tap that ‘broad tax base’ should be the starting point of next year’s budget discussion. It’s one we’ve long avoided having as it’s fraught with political implications and easy prey for those too undisciplined to make difficult decisions. Discipline doesn’t have to mean simply doing without. It can also represent learning how to contribute to a wider good.

— floggingly submitted by Cityslikr