Can’t Touch This

January 27, 2011

So, imagine you just finished a game of coed slo-pitch. You and the team’s centre fielder are the last ones at the bar and are into that ill-advised 4th pitcher of Canadian. He hit 4 home runs in the game although, two would’ve gone down as ‘errors’ in any official scorecard, and a 3rd one probably should’ve been caught as well. No question, though, he hit one of them really hard, really far.

“I don’t think it’s out of the question,” he offers bibulously, “given the right pitch, at the right moment, I could take Doc Halladay yard.”

You might call that a little deluded, right?

And yet we allow the mayor and his equally self-aggrandizing councillor brother to promote the idea that they — inheritors of a label printing business from their father that employs, what? 300, 400 people? (You’d think I’d remember since the mayor took every opportunity to tell us on the campaign trail) — are equipped and have the business acumen to bring the corporation of the city of Toronto to heel. An organization with annual budgets over $10 billion and that employs 34,000 full and part-time employees. Sure, why not, boys? And after that, why don’t you mosey on over and sort out GM or Ford? Business is business, right? Government is business. Easy-peasy.

“I can assure you every department down here has fat,” Councillor Ford said at the budget committee meeting on Tuesday, touting the 2 months of experience he’s accumulated at City Hall already. “There isn’t one single department that does not have fat down here and they would not survive in the private sector, I guarantee you … In my guesstimate, there’s probably 10 per cent waste and fat …People have been down here too long, they don’t know what’s going on in the real world. The real world is making things run efficiently.”

There’s a lot more where that comes from, and sifting through it would be worth another post but I use this as an example of how cavalierly and nonchalantly the councillor, the mayor, his budget chief and every one of the other right thinkers on the budget committee just toss about numbers as if there are no implications or repercussions to them. Just like that, Councillor Ford  ‘guesstimates’ there’s ‘probably’ 10 % waste and fat that can be disposed of and no one would be the wiser. So simple, it’s a wonder no one’s ever thought of that before.

There’s just one hitch to this whole New Sheriff In Town schtick that the mayor and his posse are playing at. It’s not going to be all that and a bag of chips. As pointed out by Matt Elliott over at Ford For Toronto (and if you haven’t checked the site out yet, bookmark it now or follow along on the Twitter at @FordForToronto He is so much more informed than we are and doesn’t demand that you take up your entire lunch to read his posts) this past Monday, the city’s fairly handcuffed financially.

It goes something like this: Toronto’s biggest source of revenue, nearly 40%, comes from property taxes (which the mayor happily broke a campaign promise and froze this year). About 77% of that money goes to pay for largely inelastic items that can’t easily be sliced and diced because they are provincially mandated programs or are services that, either, “involve arbitrated labour contracts” as Ford For Toronto puts it and/or the mayor wouldn’t touch in a million years like the Police Services, at least not 10% worth.

Which means when the Fordites realize that privatization isn’t going to bring them anywhere near the amount of savings they, with their infinite private sector wisdom planned for, they are going to be faced with either raising taxes (the horror! The Horror!) or bringing the axe down on things like libraries, children’s services, long term care homes and services, city planning. They might be just fine with that but I’m guesstimating here it’ll start cutting into their popularity as all those folks who didn’t really vote for service cuts because the mayor assured them – no, guaranteed them — he wouldn’t cut services, will snap to attention when their bus stops running or their library branch starts closing on Sundays or they’re forced to put their little tot into unlicensed child care. There’s just not that much money, er, fat left over for them to cut away at.

It’s not like at Deco Labels and Tags when ‘customers call you up and ask for a 10 per cent reduction or they’ll go somewhere else’ and you have to lay off just 2 or 3 people and make do without year-end bonuses. Hundreds of people, perhaps thousands, will be affected by your customer demanding a 10% reduction at City Hall. That’s why the government isn’t just like a business, no matter how much you think it is and how much your supporters want to believe that’s true.

And, lest we forget, the Fords aren’t the first businessmen-turned-politicians who have brought their private sector savvy to City Hall. Remember His Honour Mel Lastman? The self-made millionaire appliance salesman possessed much more municipal governance experience than the Fords and he ultimately proved to be way in over his head, discovering (to our detriment not his) that a city of this size and complexity is nothing like running your own business.

It’s unfortunate we insist on re-learning that lesson over and over again.

submitted by Cityslikr


Fun With Numbers

February 27, 2010

With all the talk of Toronto’s looming economic apocalypse, I decided to submerse myself in a little policy wonking. I hunkered down with both the Toronto Board of Trade’s early February report, The Growing Chasm: An Analysis and Forecast of the City of Toronto’s Finances and a CUPE commissioned paper from economist Hugh Mackenzie entitled, Reality Check: Toronto’s Budget Crunch in Perspective. Two opposing points of view; two tales of two cities.

Now, I am no economic whiz. Numbers, pie charts, graphs and stats tend to make me break out into a cold sweat. Like most of us, I can be baffle-gabbed and hoodwinked when set upon by numerical waves. So in no way should this be taken as a valid economic assessment of these reports. Rather, what blinks before you is a general overview of my impression of them.

Firstly and not surprisingly, the conclusions drawn in both papers reflect the opinions and standpoints held by those who contracted, as it were, the reports. As to be expected, I guess. Still it feels a little, how shall I say, unscientific. But that just may be the nature of the beast when it comes to the field of economics as a whole.

In the Board of Trade’s The Growing Chasm, there is no mistaking whatsoever how we must not tackle the city’s dire financial situation and burgeoning structural operating budget deficit. Of their report’s 34 pages, two (#s 21 & 22) are delivered in dark highlighted boxes. Within those boxes is an impassioned plea against commercial property tax increases. According to this study done by Canada’s largest chamber of commerce, businesses in the 416 area code already bear an unfair tax burden and cannot be expected to carry anymore of the load. If future city councils were to try this than businesses would have no choice but to pick up their stakes and move to more tax friendly locations in the GTA.

To the Board of Trade the actual culprit for City Hall’s runaway spending and growing structural deficit are the wages and benefits that are doled out to municipal employees. Of course in his report done at the behest of the Toronto Civic Employees Union Local 416 of CUPE, Hugh Mackenzie strongly disagrees with that notion. His numbers suggest that employee wages and benefits are perfectly reasonable and that, in fact, Toronto’s recent increase in operating expenditures is 4% lower than the increases in municipal expenditures throughout the rest of Ontario.

Again, I can’t decipher the numbers thrown around in these reports well enough to be able to ascertain who’s massaging what figures or who’s cherry picking what data but I am confident enough to say that the Board of Trade’s report contains a methodological blemish that makes me, at least, suspicious about the veracity of their report. Early on in the Growing Chasm it is suggested that the city’s structural operating budget deficit has been around “since at least the start of the decade”. Sounds a little vague. Surely something this important, this ominous structural operating budget deficit, can be traced back a little more accurately than simply “Since at least the start of the decade”?

No matter. The report then bases all its assertions on the numbers gleaned from the 2002-2008 period. The end number, 2008, is reasonable as it is the last year for which the statistics are available. But why start at 2002? Why not begin right at amalgamation with the birth of the megacity before the structural operating budget deficit reared its ugly head in order to give us a full and complete view of the city’s finances from day one? 2002 seems an arbitrary snapshot as if the Board of Trade needed just that time frame to prove their point. It’s analogous to someone trying to establish the fact that the ancient Romans were poor builders of edifices by pointing out the shoddy condition of the structures from, say, 1945 to the present day.

Or maybe I’m just missing something. Clearly everyone in the mainstream press and the front running candidates for mayor have hopped on (the Toronto) board of Trade. There is a Growing Chasm. City Hall has taken part in an unsustainable spending spree! Cuts must be made! Assets sold! Taxes frozen!! Anything less and we will be going to hell in a hand basket while businesses flee the downtown core to the more amenable environs of 905.

No question. No doubt. And no paying attention to that man over there, Hugh Mackenzie, telling you otherwise.

studiously submitted by Acaphlegmic