Our Ongoing Taxing Problem

January 8, 2016

Let’s start with the caveats.caveat

An over-reliance on property taxes as the main source of revenue is not ideal especially for a city the size and scope of Toronto where the services it provides to residents and businesses go beyond the traditional municipal mandate of picking up garbage and keeping the streets safe and clean. This year, once again, nearly 40% of the city’s revenue for its operating budget is coming from property taxes. Read David Hains’ Torontoist property tax explainer from a couple years ago to see just how unwieldy and politically problematic (if reliable) property taxes are.

Secondly, there is no question that the two senior levels of government at Queen’s Park and in Ottawa need to seriously reach deeper into their pockets and start helping out the city more on issues and policies that work at regional and national levels. handitoverHousing newcomers who disproportionately and unsurprisingly begin their new lives in the bigger cities where more opportunities present themselves. Or, properly funding a transit system that carries a good chunk of non-residents to and from their destinations in the city. I mean, imagine if the provincial Liberal government had made good on its promise to re-establish funding half the TTC’s annual operating budget back in 2003, the hundreds of millions of dollars (billions even?) that could’ve gone into, say, the state of good repair backlog?

That said, we need to stop thinking of ourselves as over-taxed here in Toronto. Any way you cut it, our property tax rates in this city in no way should be considered exorbitant, not even close. Not in terms of rates, direct comparisons with other GTA municipalities, as a percentage of household incomes, with the inclusion of the Land Transfer Tax and waste collection costs (pages 104-107). taxburdenEven considering the perhaps more tangible concept of property taxes per capita (which Joe Drew and Rowan Caister did back in 2013) which puts Toronto above the GTA average doesn’t show anything resembling the significant spike some of are anti-tax types would like to portray.

Toronto simply is not groaning under the weight of onerous property taxes. There isn’t any sort of argument to be made for annual property tax rate increases below the rate of inflation. None. It’s simply political gold, pandering, in other words.

Mayor John Tory knows this. That’s why he’s tossed up his .5% City Building Levy proposal. Coming from the property tax base, like the Scarborough subway levy, it’s just a differently named property tax rate increase.shellgame1

An argument could be made about relieving the pressure from the property tax base as such a vital revenue base. City Manager Peter Wallace has been deftly doing just that in his 2016 budget presentations by pointing out the importance of the Land Transfer Tax in balancing the budget to date. Maybe city council needs to look at diversifying where its revenue comes from. It has the power to do so (unlike other municipalities in the province). It just lacks the will.

Sheila Block at the Canadian Centre for Policy Alternatives pitched a couple revenue ideas the other day. Reinstating the Vehicle Registration Tax plus implementing surcharges on private, non-residential parking spots – think the Eaton’s Centre or Yorkdale Mall — throughout the city would bring in an estimated combined $240 million a year. If my math is correct, that’s equal to just over a 9% property tax rate increase.

But Sheila Block and others say the same thing every year, offer up ideas and suggestions on how to help fund the stuff the city needs and expects. notlisteningAnd every year, at least for the past 5 years, a majority of our city councillors shrug and scream TAXES! before insisting there’s just more efficiencies to find, more belt tightening to be done, and we’ll be fine.

Just this morning it was reported that somewhere but not the mayor where, a serious discussion is being had about selling off some of Toronto Hydro for cash to help pay for some of our capital expenditures. Burning the furniture to pay for a roof repair. What alternative do we have? We already pay too much in taxes. That well’s dry.

It isn’t regardless of how many people say it and how many times it’s said. It’s just politically expedient to keep that idea alive. drowninginknowledgeCan you imagine going out on the campaign trail, knocking on doors, looking for support and telling people they don’t pay enough to the city in taxes and that they’re just cheap, free-loading bastards to think they do?

Appealing to our Toronto Sun-fueled sense of grievance and outrage is much easier. Turns out, however, it doesn’t pay the bills. To do that, we have to change how we talk about revenue, spending and exactly why that subway car is too jammed packed to get on. Again. That’s a conversation that begins with, As a matter of fact, no, the taxes we pay in Toronto aren’t extreme or overly burdensome.

repetitively submitted by Cityslikr


Half Measures

December 3, 2015

Earlier this week, I wrote a little something something about the “incrementalism” of Mayor Tory, as mostly supporters of his might call it. babysteps“Small, tangible actions that add up over time to real progress,” according to Siri Agrell, director of strategic initiatives in the mayor’s office.

Yesterday, in his State of the City speech at the Economic Club of Canada, Mayor Tory unleashed some of that incrementalling with a surprise announcement of a .5% Capital Building Fund levy to be added to our municipal tax bills beginning in 2017. Additional money that will be dedicated to alleviating some of our much needed capital infrastructure in transit and housing. Capital investment, currently unfunded to the tune of $20 billion or so, portrayed as a menacing iceberg in City Manager Peter Wallace’s powerful presentation to the Executive Committee on Tuesday.

Woah!

Could it be, might it be this mayor finally gets it? The news from the new city manager that the city is, in fact, revenue starved got through his low-tax mantra haze? capitalicebergFrequent critics of the mayor, Metro’s Matt Elliott and the Toronto Star’s Edward Keenan, folks I rarely have policy issue beefs with, were more than cautiously optimistic about Mayor Tory’s seeming about-face. A new era of forward-thinking might just have been ushered in at City Hall.

I don’t know, though. Call me skeptical.

Incrementalism or a half measure?

In presenting staff’s 2016 budget, the city manager forcefully opened the door to a much needed, larger discussion about how Toronto funds the kind of city it wants. Let’s talk first about the things we want to do, want to build and then proceed to the way we plan on paying for it. For too long, it’s been done the other way around. Here’s what we’re going to spend and here’s what we’re going to spend it on. (Steve Munro does a much more thorough job explaining the process than I could.) emptypocketsMoney for our civic aspirations has remained in short supply.

To my mind, rather than seizing the opportunity presented to him to lead that vital conversation, Mayor Tory’s sudden jerk in the right direction, nipped it in the bud. See? I listen. I respond. I am doing something.

But just how much exactly is he doing by floating this .5% capital building fund levy? Concluding a lengthy Twitter essay (yes, such a thing does exist), Councillor Gord Perks suggested that at its height in 2022, after a 5 year roll out, the levy will bring in about $65 million a year. “The $65 miillion tax increase proposed by @JohnTory will only cover 1/20th or 5% of our unfunded capital.”

Is that somehow supposed to show the other levels of government that the city has finally put on its adult breeches and is prepared to pony up and pay its way? Here’s a nickel on the dollar. We’re good?

Underwhelming, I’d call it. Mostly for show. It’s hard to imagine it really addressing the city manager’s call for a serious discussion.

While applauding the mayor for proposing the levy, Sheila Bock of the Canadian Centre for Policy Alternatives urged council to think bigger, revisit the revenue toolbox it has at its disposal. comingupshort“These untapped powers provide the city with a menu of options that could raise more than $400 million annually,” she wrote. Remember that Vehicle Registration Tax that got repealed a few years back? Generated about roughly the same annual amount as the mayor’s levy will in 2022.

Too rich for Mayor Tory’s taste, it seems. Little steps instead. Walk before running. “Small, tangible actions,” like his director of strategic initiatives might call them.

Or, as some of us less persuaded might see it, blunting any chance at forward progress or real change. The fact that the mayor vigorously denied the levy was actually a property tax increase in order to keep his campaign pledge of maintaining property taxes at or below the rate of inflation suggests that he’s not really prepared to take on the hobgoblin of misguided, small-minded Fordian penny-pinching ways at city council. babyfalldownHis initial attempt at implying his levy was simply replacing the Scarborough subway tax that was set to end in 2017 (spoiler alert: It isn’t) also doesn’t augur well for the strength of his convictions on revenue generation.

So yeah, I continue to see the glass half empty in terms of Mayor Tory’s motives with this move, half empty like the gesture it is, a mere token. Should he be applauded for giving the impression of being almost, kinda decisive? I don’t know. It’s been pretty much his approach to governance since day 1. Nothing about this strikes me as new or encouraging. A small step when what’s required is a big, bold leap.

unconvincedly submitted by Cityslikr


The Source Of The Problem

August 1, 2014

So, I’m catching up on my magazine subscriptions and I come across this interesting article, toomanymagazinesCanada’s Infrastructure Gap: Funds missing to repair our deteriorating public utilities, in the June 2013 issue of the Canadian Centre for Policy Alternative’s Monitor. That’s right. June 2013. I’m a little behind. Stop me if you’ve read all this before.

Not to come across the fatalist here but it’s hard to read this report and see how all the plans and platforms we’re hearing during this campaign from mayoral and city council candidates for making Toronto a better place to live are going to make a lick of difference.

You see, there’s one reason, and one reason only this city, along with every other city in the country, is facing the kind of fiscal crunch they’re facing in terms of increased congestion, affordable housing, crumbling, aging and crumbling infrastructure: the near absence of the federal government. crumblinginfrastructure3Ottawa’s where the money is and they’re not rushing to hand much of it over.

And it’s not just a Harper government thing either. For decades now, Ottawa has backed away from its traditional commitments to contributing to municipal capital projects. Liberal red or Tory blue, both have stepped away from the funding table, offering up little more than what is politically beneficial to them.

Here’s the situation, summed up in one paragraph:

In 1955, the federal government accounted for 34% of capital investment. By 2003, it had declined to 13%, the provincial share remained constant at 39%, and the municipal share increased from 27% to 48%.

Even with the bump up of federal infrastructure spending in the face of the 2008 economic crisis, it remains below the necessary level, as a percentage of the GDP, to even help maintain a state of good repair. crumblinginfrastructureThat shortfall has almost exclusively fallen onto the shoulders of cities to deal with as the provinces haven’t really picked up any of the slack left by federal neglect.

While the majority of our tax dollars are bundled up and sent to Ottawa and (in the case of Ontario) Queen’s Park, the level of government with the least ability to generate the revenue now has the most responsibility to pay for the needed infrastructure. Bit by bit, things get put off, ignored, upgrades and expansion are delayed until the work has to be done or even more drastic measures taken. Sell off public housing stock to help pay for upkeep on the rest anyone?

For many people, they make little distinction between the jurisdictional powers of our 3 levels of government. crumblinginfrastructure1For them, they pay all these taxes and watch as things get worse around them. The roads suck. The city’s a little grubbier, more garbage on the streets. Their basement’s flood when it rains. Where’s all our money going? they demand.

And the ground is made fertile for the likes of Rob Ford and his merry band of anti-government tax-haters.

The city doesn’t have a revenue problem. The city has a spending problem.

Truthfully, there’s every reason to think Rob Ford doesn’t make the distinction between levels of government, and who taxes what and where that money goes. He has proven himself to be grossly uninformed about the job he’s been elected to do for nearly 14 years now. crumblinginfrastructure2Don’t rule out the possibility that when he asks the province and Ottawa for more money to fund things like his Scarborough subway pet project, he still adamantly believes the city doesn’t have a revenue problem.

Those damn councillors’ office budgets! $12 000 for umbrellas?!

Unfortunately, cutting all those nice-to-haves won’t build all the need-to-haves to put this city back together again.

We end up fighting amongst ourselves over dollars made scarce by successive absent federal governments. We can’t afford that. And people die, homeless on the street. That’s the federal government’s job. crowdedbusAnd parents are forced to put their kids in unlicensed day-care centres. We need to find efficiencies. And people are crammed tightly together on buses and streetcars.

The fact is, even with the modest types of revenue tools Toronto was given back in 2006 — the ones many of us still rail against — the city alone cannot plug the holes that need plugging, never mind build and expand the things we need to build and expand. Even the province can’t play the white knight and slay the infrastructure deficit dragon we face although, they could be a whole lot more helpful. The federal government needs to re-assume the level of investment in cities it did 50 years or so ago. crisiswhatcrisisProbably even more so, given the level of neglect it’s allowed to happen.

Easier said than done, obviously.

Municipalities remain at the mercy of the provincial governments. Ottawa is in another stratosphere entirely. Where’s the leverage cities have to start making demands of the federal government?

But a good first step might be to recognize our commonalities rather than emphasize our differences. The problems all cities have right now in coming up with the funding to build better, stronger communities and neighbourhoods, to bring our infrastructure from somewhere back in the mid-20th century, notmyproblemstems from one source and one source only. The negligent disregard with which we are treated by our federal elected representatives.

It’s time we started to use our numbers to make our demands better heard in Ottawa. The fact of the matter is, as goes Toronto (or Montreal or Winnipeg or Calgary or Vancouver), so goes Vancouver (or Calgary or Winnipeg or Montreal or Toronto). As go our cities, so goes the country.

unitedly submitted by Cityslikr


Trash Talk

May 12, 2011

Let’s talk some trash. Trash collection, that is. And that’ll be the last recycled pun (except for that one) we’ll use on the issue.As we hurdle toward the westward-ho garbage privatization debate set for city council next week, wouldn’t it be nice to have some solid facts and figures on the table in order for those who will ultimately make the decision to do so logically and with well grounded reasons for proceeding. Councillor Josh Matlow attempted to accomplish such a task on Tuesday night hosting a town hall meeting moderated by the ever moderate Steve Paikin of TVO fame. On one side was pro-privatization advocate and Public Works and Infrastructure Committee Chair Denzil Minnan-Wong. Hugh MacKenzie, economist and research associate at the Canadian Centre for Policy Alternatives, represented the anti-side of the equation.

Reading through accounts of the evening, it’s clear that no real consensus emerged. “Last night’s trash talk offered no clear answer on the garbage privatization debate, but one very popular moderator,” Carly Conway of the Torontoist tweeted yesterday. Hey. Maybe if we contract out trash collection to Steve Paikin, everyone might be happy! “It answered some questions for me and, frankly, left me with more questions than I came in here with,” Councillor Matlow told the Torontoist after the town hall.

It seems inconceivable to me that such an important issue that deals with not only a lot of money but peoples’ livelihoods couldn’t be a little more clear cut. Evidence must exist out there from towns and cities that have unloaded trash collection onto the private sector. Case studies, analysis, comparisons of before (privatization) and after, of places that have maintained public service. Metaviews, I guess, is what I’m thinking.

If I were an actual journalist or one of those people who aggregate and research such things, perhaps it might all become obvious which way to go. I’m not but I’m perfectly willing to read the work of someone who has done it. So far, however, such documents are few and far between, lost in a sea of studies all that can be easily shrugged off by opponents as tainted by self-interest or ideology. Unions will weigh in against privatization but they’re just looking after their own jobs, right? Try reading this instead from the National Solid Wastes Management Association, a ‘trade association that represents the private sector solid waste and recycling industry.’ Yeah, so they have no dog in this particular hunt, do they.

The field is awash in solid anecdotal evidence, frankly. For every Etobicoke that loves its privatized trash collection, there’s an Ottawa that has brought at least some of it back in-house after a brief private dalliance. (Interestingly, if I understand correctly, Ottawa re-publicked collection in the older downtown area of the city which is more analogous to the core of Toronto than Etobicoke is.) Like Tuesday’s townhall, neither side is able to deliver the knock-out blow that will sway a crowd to fully embracing its position.

Running with that boxing analogy, shouldn’t the advocates for garbage privatization have to win decisively like any challenger seeking to dislodge the established champion? If we’re going to take a leap of change purely for the possibility of saving money and improved service, the case for it needs to be nearly irrefutable. Yes, we’re going to save this much money. Yes, you’re going to be happier with the service. Guaranteed, to use the mayor’s TV pitchmen promise.

As the privatization pointman, Councillor Minnan-Wong has done nothing of the sort. His constant referencing to Etobicoke as an example for why the rest of the city should privatize is both unconvincing and, possibly, inapplicable. He assured the audience at Tuesday’s town hall that Etobicoke receives no more complaints about trash collection than the unprivatized parts of Toronto. No more complaints, Councillor? Shouldn’t we be aiming for fewer? He was unable to answer some important questions from the audience including gender equity hiring by private firms. When all else failed, the councillor claimed his job was not about social engineering.

Moreover, the savings he (and the rest of the pro-privatization crowd) talks about Etobicoke receiving may not work out in the rest of the city that is laid out in a far less orderly pattern. As we’ve discovered over and over again here in post-amalgamated Toronto, what’s good for Etobicoke may not be good for East York. Money saved in one former city may not be possible in another.

And the ever changing amount of savings should also serve as a yellow flag of caution. All throughout last year’s municipal campaign, pro-privatization candidates trumpeted the $49 million Toronto would save going private with their garbage collection as reported by the C.D. Howe Institute. Under closer scrutiny, that report’s methodology was called into question. Now we’re hearing $8 million/year west of Yonge. Or maybe $6 million. $2 million isn’t being ruled out. What’s next? Well actually, we’re not going to save any money doing this…

And frankly, if the likes of Councillor Doug Ford can blow off $7.8 million or the city pays to police officers for paid duty overseeing construction sites and the like (“Keep in mind [paid-duty costs represent] one-half of 1 per cent of the construction projects that we have to pay for,” the councillor said), where’s the reasoning for undertaking such a massive change of operation in collecting our garbage? What will his response be at next week’s council meeting when a fellow councillor points out that an $8 million saved privatizing garbage collection amounts to about 1% of the near $800 million shortfall the city’s facing? Blustery dismissiveness, I’m guessing.

With no firm or substantive savings to tout and the only improved customer service to point to is the assurance that privatization will mean no more garbage strikes like we saw in the summer of 2009, it’s hard to see this as anything but ideological. According to the Toronto Star’s David Rider, at Tuesday’s town hall meeting “Minnan-Wong said the contract would have ‘continuation of service’ provisions to ensure that, even if the contractors’ workers went on strike, the trash would get picked up in the privatized district.” In other words, in contracting out garbage collection, the city would insist that the winning bid include a provision that would bring in scabs to cross a picket line in the case of a strike, thereby rendering the power of collective bargaining null and void.

Huzzah! Questions linger about what if any savings taxpayers will see. We can’t say for sure if they’ll notice any difference in how their trash is collected. As continued innovation in recycling? Like Councillor Minnan-Wong has said, social engineering isn’t really our job. But we do know one thing. Privatization is going to stick it to the union. Guaranteed.Spite based policy making. In tough times, is there anything more satisfying?

stinkily submitted by Cityslikr