All Fried Up In The Big Smoke

Less political. More fictional.

The Simple Truth

Posted on June 23, 2016 by "Brother" of Cityslikr

For the second time in about five years, the audit/advisory/consultant thingie, KPMG, was asked to answer the burning question: Does Toronto have a spending or revenue problem? For the second time in five years, KPMG has reported back: All things considered, there’s more of a revenue problem at work than spending. The city’s pretty tightly run. To avoid seriously cutting essential and even mandated services and programs, City Hall should look at accessing increased revenues.

Oddly though, what many of our elected local representatives, including Mayor John Tory have heard and concluded is: Right. Just like I thought. We need to cut spending. Tighten our belts. To the efficiency-mobile, Batman!

Some urban legends die hard, it seems, if at all, when they run contrary to the political ideology of right wing, small government politicians. There is always more fat to be trimmed, gravy to be drained, excess to excise before we can start talking about revenue. We must learn to live within our means. There’s always money in the banana stand.

This sentiment is so strong with enough of our city council that it’s more than a little surprising that KPMG was called upon to deliver a revenue tools report at all. It was and it did, the City of Toronto Revenue Options Study coming out earlier this week. A boatload of suggestions for raising revenue, some immediately in the city’s purview, others it would have to get provincial permission to implement.

I want to focus on one section of the report, 17, pages 165-170. (A PDF I cannot figure out for the life of me how to load up on this page here, so you’ll just have to follow along via this link). Property Tax Analysis.

This is another shibboleth our mayor and his council allies, and the administration before it, and pretty much every small-minded member of council since at least amalgamation, has taken and spouted as gospel truth. We pay too much in property taxes, dammit! Homeowners (as if it’s just those owning their homes pay property taxes) are already stretched to the max. They cannot afford any more hikes in their property taxes. Seniors will be chased out into the streets…

Similarly, the information presented above suggests that residential property tax rates levied by the City of Toronto and the implied burden on households, expressed both in dollar terms and as a percentage of household income, are lower than those in the majority of other GTHA municipalities. This indicates that there may be an opportunity to increase property tax rates and still maintain burdens that are below the average of the municipalities reviewed, while also considering that Toronto is the only city in the sample that also applies MLTT.

What’s that, you say? By almost any measure, Toronto’s property tax rates “are lower than those in the majority of other GTHA municipalities”? That simply can’t be. If it were, our local politicians wouldn’t be pretending otherwise. “This indicates that there may be an opportunity to increase property tax rates and still maintain burdens that are below the average of the municipalities…” So, why all this ‘at or below the rate of inflation’ insistence Mayor Tory’s pursuing?

Now, I get all the property tax caveats. It’s not a tax that accurately reflects or benefits from current economic realities. The city is too dependent on it and needs to diversify its revenue sources more. There are people who are house rich but cash poor, and property tax increases could jeopardize their ability to own. Toronto does have access to another form of property taxation, the Municipal Land Transfer tax, that other municipalities don’t.

All these can be addressed but the point I’m trying to make here is this determined pursuit of at or below the rate of inflation property tax rate increase simply does not measure up to reality. Toronto property tax payers are not already overburdened like the mayor claims, just like his predecessor had trumpeted. As Matt Elliott pointed out last month after City Manager Peter Wallace’s Long Term Financial Report came out, “Since 2010, when adjusted for inflation, the city’s overall take from property taxes has gone down by 4.8%. Homeowners have gotten a break.”

Property taxes have contributed less to the city’s budget over the past 6 years, and even keeping rate hikes at the rate of inflation will further reduce them since costs will inevitably rise higher than that. 5%, I believe the city manager told the budget committee yesterday in its initial meeting about the 2017 budget. If so, other sources of revenue will be needed to help balance the operating budget or further cuts to spending which is already down in terms of per capita numbers since 2010, as Elliott also pointed out.

Arrows heading in a different direction than the one Mayor Tory wants us to believe.

There will be new revenue tools introduced, though very likely not in time for the 2017 budget. The mayor, however, has made a point of saying for capital spending which explains his spate of transit announcements this week. Softening the public up for new taxes or fees, dedicated to building all this new stuff the city wants and needs while the operating budget will continue to be squeezed.

Or, as Councillor Mike Layton quoted the city manager telling the budget committee, heading toward “direct austerity” and “smaller government”.

As the KPMG revenue options study suggests, that will be a choice Mayor Tory and his council allies will make not one made out of necessity.

— factually submitted by Cityslikr

We Pledge Our Allegiance To Ford Nation

Posted on June 21, 2016 by "Brother" of Cityslikr

Maybe in order to keep from descending into daily bouts of screaming madness following along with local politics in this burg, one needs to step back and accept the fact that a majority of voters in this city are small c conservatives. They expect very little from City Hall and believe (erroneously in most cases) they make very few demands upon it. Keep our taxes low, streets clean and safe and get the garbage picked up, and we’ll get along just fine.

Rob Ford’s biggest mistake as mayor wasn’t his loutish and illicit behaviour, at least not directly. The faux pas he committed was exposing us as the bumpkins we truly are in supporting such a character in the first place, the miserliness at our civic core. David Miller’s time in office was an outlier. He tried dragging us into the 21^st-century and we didn’t care for it one little bit. John Tory has restored us to our natural state, explaining his continued popularity in spite of his continued mishandling of important files. No matter. As our friend John McGrath suggested earlier this year, “Toronto got exactly what it voted for in 2014: 85% of Rob Ford’s policies with 200% more syllables.”

Mayor Tory continues to dig in and boldly adhere to our traditional ways of municipal governance with his letter to the budget committee, laying out his ‘Priorities for the Development of the 2017 Budget’. Which are? High in aspiration, low in actually delivering anything other than keeping property taxes unsustainably low and further squeezing the life out of many city services and programs.

David Rider in the Toronto Star and David Nickle of Inside Toronto go into much more detail about what happens if the budget committee and, ultimately, city council follow the mayor’s lead with this. While he talks of new revenue discussions and finding savings from the biggest line item in the city’s budget, the police services, it’s hard to imagine any of that will be in place in time for this year. So in the meantime, Mayor Tory gets to shake every other tree at City Hall in the hopes of finding more low-hanging fruit despite the fact he’s been told repeatedly there’s very little left, none in some cases. Any further paring, so to speak, will only end up causing damage.

And we will cheer him on because that’s what we expect of our elected municipal officials to do. As little as possible, costing us as little as possible. If urban planner, Brent Toderian is correct when he says, “The truth about a city’s aspirations in its vision. It’s found in its budget,” what does that say about Toronto and its vision, its expectations, its aspirations? Mayor Tory’s letter to his budget committee would indicate that we remain, deep down, Ford Nation.

What other conclusion can we draw?

Below, is a copy of Mayor Tory’s letter to the budget committee with some editorial work of mine in red.

* * *

June 17, 2016

City Hall, 2nd floor

100 Queen Street West

Toronto, Ontario

M5H 2N2

To: Gary Crawford, Budget Chief, and Members of Budget Committee

Re: Mayor’s Priorities for the Development of the 2017 Budget

Toronto is a vibrant and growing city, but it is changing quickly. Our population is increasing and our demographics are shifting, bringing new pressures and expectations.

To compete in today’s global economy and maintain Toronto’s character as vibrant, affordable and liveable for all ages and income levels, the City must keep up with the pace of change and think differently about its role in people’s lives.

We must prioritize our investments and spend our money wisely, providing services with a direct, positive impact for the public.

To that end, this letter outlines my expectations of all City Programs, Agencies, relevant Corporations, and Accountability Offices for the 2017 operating and capital budgets:

The City’s tax-supported 2017 net operating budget target is zero percent over the 2016 net operating budget, meaning $3.97 billion; (No new money)

Inflationary pressures and negotiated wage increases should be absorbed within existing budgets; (In fact, even less money than last year)

Any new or enhanced services should be funded from within existing budgets; (You want to try or buy anything new? Get rid of some old stuff first)

Any new or enhanced services with a “net zero” funding impact should be reviewed for impact on staff time and planned service delivery; (Maybe your new or enhanced service isn’t “net zero” if it costs money for the city to implement and deliver. Did you ever think about that?)

Current service levels should be assessed to confirm their value for money and benefit to the public; (A nice-to-have or a need-to-have?)

Opportunities for efficiencies and alternative service delivery models should continue to be pursued, including contracting out; (See Ford, Rob, Mayor, 2010-2014) and,

Any property tax increase should be at or below the rate of inflation. (No new money. In fact, very likely, less.)

City Building Priorities

While our budget is under real strain (Self-imposed), we must continue to build the city we want (In theory). To that end, I have also identified strategic priorities to complete the mandate we have set out over the past two years.

(This following section is a house of cards built on the contradictory impulses expressed in the first sentence. All the stated intentions here are undermined by (a) the faultiness of the intentions themselves i.e. SmartTrack and/or (b) the budgetary constraints stated above. This is a zero sum game here. For any of this to happen, something else will have to be sacrificed somewhere else in the budget.)

It’s time to exert discipline and ramp up our efforts to build a modern city and an efficient, ambitious and effective government, through:

The ongoing planning, design and construction of our transit network expansion, including SmartTrack, the optimized Scarborough network and the Relief Line, which will take cars off the road, reduce overcrowding on existing transit lines and dramatically increase and improve service across the city, while protecting the existing new transit investments. This transit expansion must move forward efficiently, in order to capture the full value of the currently proposed federal infrastructure investments;

Continued investment in Toronto’s mobility network to provide safe, efficient and reliable ways to move around the city for those travelling by car, bike or on foot;

Continued implementation of TO Prosperity: Toronto Poverty Reduction Strategy investments provided for in the 2017 work plan;

Further investment in affordable housing, through our Open Door program; and,

Continued investments in building on Toronto’s standing as one of the most liveable cities in the world through support for arts, culture and public realm projects across the city. (Hoo-rah! A whole bunch of empty cheerleading)

Government Modernization

In the last two years, we have taken some long overdue steps to confront the City’s real underlying pressures without just making arbitrary cuts. (Mayor Tory’s previous call for 5% across the board cuts belies this statement)

The real waste and inefficiency in our City government is found in outdated systems and services, unnecessary duplication and a slow embrace of technology. This is why, despite the declarations of victory made by some, I continue to believe there is much work to be done making large government operate much more efficiently. (No one I know has ever said there’s no more efficiencies. As the city manager has made very clear, there are simply not enough to pay for the stuff the mayor says he wants)

And so, to achieve further real progress, I would like to see an increased focus on digital solutions, measurement and analytics, as well as the expedited completion or implementation of the following reports and reviews:

The Real Estate Review, which will provide an up-to-date assessment of the City’s real estate holdings and create important city-building opportunities;

The Toronto Police Transformational Task Force, which will make recommendations to reduce the growing TPS budget through modernization;

Procurement Review, which is examining the City’s procurement process, especially related to technology solutions;

An immediate prioritization of work that transitions the City to a data-driven organization. All work by City Programs, Agencies, relevant Corporations, and Accountability Offices should be measured, tracked and analyzed so the City can make budget decisions based on sound analytics;

City Programs should also work to meet our Open Data Strategy and targets; and, City Programs, Agencies, relevant Corporations, and Accountability Offices should prioritize work that provides the people of Toronto with mobile friendly, technology enabled services. This efficiency will free up resources to offer direct services to those who cannot access this service on line.

There is no either/or choice between government efficiency and ambitious city building. (Again, nobody has said otherwise) We can and must contain spending and become more efficient while continuing to make strategic investments in transit, housing and vital infrastructure.

We can do this while maintaining the values and character that make Toronto great.

But it will require a new approach. (If by new approach, the mayor means the same one employed by the previous administration, then yes)

For too long, we have relied on property tax and MLTT revenues without introducing new ways to pay for the city building efforts we support. Alongside the 2017 Budget Process, we must have a serious conversation about new ways to raise revenues, especially to finance longer term capital investments like transit and housing, and we will. (Seems here the mayor is willing to talk about new revenue sources for capital spending, leaving the operating side of the equation dwindling under the weight of at or below the rate of inflation property tax increases)

In the meantime, we owe it to the public to spend their money wisely, before we ask them to contribute more. (**cough cough** Scarborough subway **cough cough** Gardiner East hybrid **cough cough** **cough cough**)

I encourage staff from all City Programs, Agencies, relevant Corporations, and Accountability Offices to help us build a truly modern city that is the envy of the world and to do it while keeping the interests of the people we serve, the residents of Toronto, first and foremost in our minds. (Define “interests”)

Sincerely,

John Tory

Mayor of Toronto

— submitted by Cityslikr

Smoke Them Out

Posted on December 20, 2015 by "Brother" of Cityslikr

Here’s the original, less gooder edited version of the 2016 budget launch post I wrote for the Torontoist earlier this week.

Speaking of which, while I recognize plenty of worthy causes out there for your consideration this holiday season, you would be making a very substantive contribution to the life of this city by sending some cash the Torontoist’s way. Councillor Shelley Carroll, a former budget chair at City Hall, gave her Best Budget Coverage nod to the Torontoist’s work this week. This can’t happen over the long run without help from readers and everyone else who wants to truly be in the know about the city they live and go about their business in.

So do yourself a favour. Contribute now.

* * *

As the 2016 budget launch wrapped up at a special Budget Committee meeting today, I said to a fellow council watcher as we left the room, “Well, the chicks have come home to roost.” The piper was now demanding his payment. [Insert another cliché here for an imminent moment of decision.]

In what’s being referred to this year as a “Preliminary Budget” instead of what I believe has been called in recent years, “Staff Recommended Budget”, city staff crunched the numbers on both the operating and capital sides of the ledger and delivered up a document that, at first glance, didn’t scare the hell out of everybody. The opening pressure on the operating side seemed highly manageable. $57 million, and bringing in Mayor Tory’s proposed at the rate of inflation property tax rate increase of 1.3%, drops it down to just $23 million. A relatively meagre 2.17% bump in the rate would eliminate the opening pressure altogether.

But here’s where the budget qualified as only ‘preliminary’ and not ‘staff recommended’.

City staff did not eliminate the operating deficit as it has done previously, recommending a property tax rate increase for city council to essentially rubber stamp (after much back and forthing during the next couple months). This year, staff threw down the gauntlet, as City Manager Peter Wallace said they would do earlier this month at his fiscal foundation presentation at Executive Committee. Here’s the revenue you have. Here are the things you said you want to have. You, city council, decide on how and what gets funded. You balance the books, not staff.

Oh, and one last thing: there’s an additional $67 million of requests and directives from council that staff have yet to find any funding for. TTC service improvements like early Sunday openings. Much of the mayor’s Poverty Reduction Strategy. Unfunded. In reality that makes for a $124 million opening pressure before you start factoring in property tax rate increases.

And hey. Let’s not even get started on the unfunded capital expenditures city council has thought would be nice but conveniently forgot to find funding for.

Lest you think I’m all gloom and doom here, that is not my intention.

This approach by staff to starting the budget process in the hole, negatively unbalanced, forces city council to start putting its collective money where its mouth is. For too long, too many of our local representatives have drawn up grand Wish Lists, amassing proverbial castles in the sky (and subways in the ground) without ponying up the cash to pay for it. Worse yet, strangling off sources of revenue in the name of Respecting The Taxpayers.

Well, not this year, not if city staff has their way. With this year’s preliminary budget introduced not balanced, staff is attempting to smoke out councillors from their respective hiding spots. You want to keep taxes low and refuse talk of any other new sources of revenue? What are you going to cut? What services are you going to deny or take from city’s residents? You want to help people lift themselves out of poverty? You want the trains to run on time and not over-capacity? How much do you want to increase taxes (above the rate of inflation, by the way)? Do you want to have another discussion about new revenue tools?

City councillors can no longer have it both ways. That is exactly how Toronto has found itself with a mountain or two of unfunded liabilities and projects waiting in the wings. False promises of grand services, a world class city and low, low taxes. Efficiencies will pay for that, with a little dose of current from capital. All good.

As city staff made clear today, it wasn’t all good. If they have their way, 2016 will be the year city council will finally have to either put up or shut up. There is no longer anyplace they can hide for cover.

— resubmittingly submitted by Cityslikr