Taxes! What Are They Good For?

October 11, 2012

You know who likes paying taxes? Take it away, former mayor Mel Lastman. N-o-o-o-o-body! Except maybe Jesus who bade us to render onto Caesar what was Caesar’s and Oliver Wendell Holmes with his belief that taxes made for civilization.

Both partisan based rhetorical flourishes, if you ask me. Who takes a look at their pay stub, sees all the tax deductions and thinks, at least I’m contributing to a better society? It’s only about a grudging acceptance. Death and taxes and all that.

You know who thinks they’re over-taxed? Everybody. There’s never been just the right amount of taxation. That balanced point where you’re sure you’re getting absolute value for money. No extras. No gravy. There’s always a sense of couldn’t this be done less expensively, more efficiently.  It’s all about a grudging acceptance. Death and taxes and all that.

Only the obdurately ideological, those suckled on the teat of anti-government sentiment that has been ours for over 30 years now would senselessly argue against the notion of taxation. Oh, hello, Councillor Doug Ford.

“We’re against all taxes,” he said in March. “All taxes are evil as far as I’m concerned.”

You’re welcome, sir, for all the roads you drive on regularly, and for the protection our police constantly offer your brother to keep him safe.

Councillor Denzil Minnan-Wong jumped aboard the mindless train this week at the Executive Committee meeting during a discussion on transit funding strategies. Referring to the list of various revenue generating ideas in the City’s CFO report, the councillor said, “That’s like asking which poison would you like to drink? Would you like the hemlock? Would you like the rat poison? We should be asking them, would you like to take that poison?”

This from the mouth of our chair of the Public Works and Infrastructure Committee, folks! You know, all that stuff we need to build in order for the city to function properly? How do we undertake such massive endeavours? Taxes, that’s how.

Councillor Ford and his fellow libertarian thinkers seem to believe that all good things flow from the beneficence of the private sector. You want new subways? Just ask nicely in the form of a P3 or AFP model and you’ll get your shiny new subways. It won’t cost the taxpayers one red cent.

The councillor is either being supremely disingenuous or displaying a mind blowing ignorance of how these things actually work.

Transit is funded and operates only in two ways as far as I know. Through direct government subsidies (paid for by taxes) or the fare box. If there’s another system at work that’s slipped my notice, I’m all ears.

By its very profit making nature, the private sector doesn’t build public transit without the expectation of making, well, a profit. Somebody has to ultimately pay them. That someone? The taxpayers.

So we either do it upfront with government laying out the cash as we go (in all likelihood with the help of Councillor Ford’s much vaunted P3s and AFPs to help reduce costs) or we pay later through fares to use the service. Even at that point, it’s no certainty that a private company can recoup enough profit to maintain fares and service levels at a point that makes public transit an attractive option to riders or beneficial to the transportation needs of a region. How do you strike the proper balance between the profit motive and public good? Usually from the public purse.

Yeah, we’re back to taxes again.

And this talk of needing to sit down with other levels of government in order to work through their expected contributions? Or going cap in hand, as our mayor used to deride his predecessor. Where do you think they’re coming up with the money? Errrr, taxes.

Besides, given our pressing transit needs, I wouldn’t hold my breath waiting for either Ottawa or Queen’s Park to come riding to our rescue. The federal government just defeated a bill on a national transit strategy, something every other developed country has. So I’d put them down as a ‘Don’t Give a Fuck About Transit’.

As for the province, they like to give the appearance of giving a fuck about transit in the GTHA, with their big plans and detailed maps but so far I’d say it hasn’t exactly been a priority in practice. We’re expecting a funding plan from Metrolinx next June, five years after the Big Move was unveiled. Five years! Their involvement with Transit City in Toronto has been as much about playing politics as it has been with building anything. They’ve hardly earned a reputation as honest brokers on the transit file.

But who can blame them? We’re all operating in a sweet smelling haze of dishonesty when it comes to providing public services. We want them but we don’t want to pay for them. We hate taxes but we desire what they pay for. Nothing comes for free except everything we take for granted, it seems. Roads, police, subways that stop right out front of our single family detached house with a big front lawn and an even bigger one in the back.

No wonder we hate governments and the taxes they demand from us. They continue refusing to deliver the pots of gold at the end of the rainbows the leprechauns riding on unicorns convinced us were coming our way for no money down, no interest payments ever.

finger pointingly submitted by Cityslikr


Reassessing More Than Our Property Values

August 17, 2012

In an announcement this week of Mark Towhey becoming Mayor Ford’s new chief of staff, Kelly Grant of the Globe and Mail writes that he wants to focus on the mayor’s economic strategy, including plans for the city to “implement policies to grow its assessment base, rather than raise property taxes year after year.” An ensuing social media conversation took place, questioning if that were even possible, using a wider/higher property assessment in lieu of higher property taxes. Minds much brighter than mine struggled with questions of provincially mandated revenue neutral reassessments, averaging, etc., etc.

The short answer seems to be: raising revenue is much more difficult and complicated than simply cutting services, programs and generally just not doing anything much. Our fiscal status quo leans toward inaction. Claiming we can’t afford something is simply an admission of one of two things. You’re either ideologically opposed to the concept of taxation or you don’t understand government financing. Or maybe both.

Complicating matters for Ontario municipalities is that the provincial government keeps us on a pretty short leash in terms of revenues. We rely so heavily on property taxes as a revenue source because it’s the only one we have much control over. And as the discussion this week showed even that is watched over carefully by Queen’s Park.

How?

Well, it seems cities just can’t reassess property values and then slap on the tax rate to the new numbers. In a place like Toronto that would in, all likelihood, generate a significantly higher amount of revenue. From the city’s website (h/t to Brent Gilliard) comes a provincial commandment. The effect of reassessment, at the municipal level, is “revenue neutral” and does not generate any additional revenue for the City. With a reassessment, the City must adjust the tax rate to remain revenue neutral, so no new funding comes to the City of Toronto as a result of property valuation changes.

Reassess all you want, the province tells us, it just can’t generate any more money for you.

Of course, there’s a much larger discussion to be had on this point. Municipalities shouldn’t have to depend so heavily on property taxes to, you know, run the city. Both their calculation and implementation is complex, cumbersome and, often times, politically thorny. Of all taxes, none seem to be taken as personally as property taxes. California’s 1978 Proposition 13 that severely limited the state’s ability to adjust property taxes could be seen as the granddaddy of tax revolts. Property taxes also don’t truly reflect the economic activity going on at a municipal level at any given time.

Internationally, many cities have adopted other models of taxation for new streams of revenue. Sales tax, payroll tax, hotel tax, a motor vehicle tax… OK. So Toronto certainly didn’t help its cause by backing an administration that was hell bent on repealing one of the few taxes the province allowed it to institute, the VRT, as soon as it was sworn in. Like a petulant teenagers, tossing their allowance back into their parents’ faces. We don’t need your stinking handouts. Oh, and by the way, mom and dad. Can we have some cash for extra police officers and some transit we need to build?

Still, it is odd how stingy Queen’s Park is in terms of allowing its municipal governments to figure out ways to pay for things. What’s it to them if we decide to generate revenues through a city or regional sales tax? How will a, say, .5% sales tax going into the city’s coffers adversely affect the province’s bottom line? It’s not like they’re rushing to finance Toronto’s major infrastructure needs like transit. Before you start bellowing ‘Transit City! Transit City!’ at me, note how I used the word ‘rushing’. We’re getting transit. On the province’s dime. On the province’s time.

It’s hard to look at the recent additions to Toronto’s transit system before the Eglinton crosstown broke ground and not see a pattern of self-interest on the province’s part. Arguably, we got subway lines where we needed them least that successive government’s at Queen’s Park used to burnish their cred with a very specific segment of voters. You want subways? We gave you subways. Where we wanted.

Control of the purse strings will always translate into political control. Cities less dependent on the province means cities less willing to let the province dictate its terms. What do you call that? A more equal partnership. It doesn’t quite have the ring of ‘creatures of the province’ that must sound much better to ears at Queen’s Park.

For many provincial politicians, cities are more a political chessboard than they are economic engines. All moves must be tightly controlled and very, very limited. Unless you’re the queen, of course. In provincial-municipal matters, never ever forget who’s the queen.

pawnly submitted by Cityslikr


Queen’s Park Strangers

July 3, 2012

“Too much time has been wasted,” intoned Ontario’s Minister of Infrastructure and Transportation Bob Chiarelli last week, “and we need shovels in the ground and improvements to public transit starting now. There is no time left to waste.”

All reports suggest he said this with a straight face.

If it wasn’t obvious before, it couldn’t be any clearer now: the election of Rob Ford as mayor of Toronto has been nothing less than manna from heaven for the Liberal government of Dalton McGuinty. In the havoc Mayor Ford’s wreaked on this city’s transit file (havoc the provincial government could’ve stemmed if it so chose but more on that later), Queen’s Park has been able to cover its tracks, hiding nearly a decade of neglect and indecisive mishandling of such a vital portfolio. So much so, that after TTC Chair Karen Stintz launched what was nothing more than an embryonic idea about further transit expansion in Toronto with One City, Minister Chiarelli was able to condescendingly brush it aside as a ‘future-looking concept’ with ‘a lot of merit’ but – and hold your stitches together with this — “We must not and cannot allow further council debate and delay,” the minister said. “Transit in a city like Toronto isn’t a luxury, it’s a necessity.”

The stones on these guys. Really.

For the past 17 years, transit in this city has been little more than a political football to successive provincial governments of both red and blue stripes. Kicked and punted this way and that, depending on the direction the winds were blowing, there hasn’t been anything really resembling an overall strategy as much as there’s been basic calculated ad hockery.  While the current transportation minister mouths the word ‘necessity’ in terms of transit, it’s really only been about expediency from Queen’s Park for some time now.

1995.

The newly elected Progressive Conservative government of Mike Harris decides to bury the already in progress Eglinton subway line. Unaffordable. So we’ll wait a decade and a half when the costs of building transit inevitably come down and we can have this debate all over again in its entirety.

Later on as a sop to then Mayor Mel Lastman, the Tories OK a Sheppard subway line. This little stub of a thing contributes little to alleviating congestion much. In fact, it only seems to be helping load up the Yonge subway line to past capacity. It also serves as a flashpoint to the great subway debate of 2010-12, a key element to the delays the transportation minister bemoans.

And then there was the decision to stop funding the provincial half of the TTC’s annual operating budget, a decision that candidate for premier McGuinty promised to reverse if elected but has yet to get around to nearly 9 years on in his mandate. Taking a very conservative estimate, say $150 million a year, for 17 years now, that adds up to some $2.5 billion that the TTC and taxpayers of Toronto have had to shoulder or simply dispense with for the better part of a generation now. That’s a lot of expansion of services deferred and new technologies ignored.

What Mike Harris taketh away, Dalton McGuinty hath kept tucked away.

And like his predecessor, Premier McGuinty also bestowed upon the city a subway that had more to do with politics than with practicality. The Yonge-University subway line extension up to Vaughan was hardly where a new subway was needed most. Transit? Sure. But a subway? If there, why not Scarborough was a legitimate question asked during this spring’s transit debate. Until you elect a high ranking member of the provincial government, Scarborough, might’ve been the actual answer.

Then there’s Transit City.

Until we elected Mayor Ford in 2010, the main culprit in the delays in implementation of Transit City has been at the provincial level. Originally planned to build 7 new LRT lines and upgrading the Scarborough RT, along with new rapid bus lanes, Queen’s Park blanched in the face of the economic meltdown in 2008 and pulled funding that reduced the plan to 3 new LRT lines and the work on the Scarborough RT. (What’s that again about transit in Toronto being a necessity, Minister Chiarelli?) This reversal signalled that Transit City was subject to change and opened the door for Mayor Ford to crayon in a few alterations of his own.

As our friend David Hains pointed out last week, the Liberal government seems to have a selective memory when it comes to what, who and when modifications to a plan can occur. While brushing aside One City with a pithy ‘the train has already left the station’ bon mot from Minister Chiarelli, they weren’t as decisive when Mayor Ford unilaterally declared Transit City dead in December of 2010. Fearing for their own political future in the face of the supposed might of Ford Nation, Queen’s Park played along with the charade, allowing the debate to drag on until city council itself sorted things out. Now, it’s like, time’s up, folks. The clock is ticking. Time is money.

This is not to absolve Toronto city council of all responsibility for the transit woes it now faces. We elected an obvious anti-public transit mayor in Rob Ford. We demanded our councillors repeal the VRT and put further pressure on our own ability to pay our share of things. The subway-versus-LRT debate revealed a continued parochialism running deep throughout the city.

But, as they say, a fish rots from the head down. (I don’t know if that’s true but the saying comes in handy at the moment). This city and this region have suffered from a provincial leadership vacuum on transit for nearly two decades now. At least. $6 billion in lost productivity due to traffic congestion per year in the GTA and Metrolinx’s report on funding ideas for its Big Move isn’t expected until June of 2013. If still in office then that will be almost 10 years after the McGuinty government took over power. It hardly screams urgent or not a luxury but a necessity for transit from them.

So you’ll have to excuse me, my dismissal of the provincial government as honest or serious brokers on this issue. It reminds me of my favourite line from The Sopranos. “They shit on our heads and want us to thank them for the hat.”

snittily submitted by Cityslikr


Wasted Effort

June 5, 2012

$16.4 million.

According to the Globe and Mail’s John Lorinc, that was the “Total council cost (including mayor’s office)” to the city of Toronto in 2011.

$16.4 million.

Any way you want to parse that number it’s nothing but peanuts. As a percentage of the operating budget? Even rounding it down to the nearest billion which would be 9, $16.4 million works out to roughly .18%. Yeah, less than a fifth of a percent.

How about per population? Again, rounding it down to a workable round number like, say, 2.5 million, divided by 16.4 million comes to about 15 cents. That’s right. City council costs every man, woman and child in Toronto 15¢ per year. [Or, if you do the math properly, $6.56/Torontonian/year. Still a pretty sweet deal. h/t Mg]

Yet our deputy mayor, ostensibly the 2nd most powerful politician in the city, has spent what seems like an inordinate amount of time and energy in an attempt to reduce that number even further. To where, I wonder. What amount are we willing to give to our elected officials in order for them to govern the city? Are we looking for a corps of volunteers like the fire department of Councillor Holyday’s youthful days in Etobicoke? (I completely made that up. I have no idea if Etobicoke’s fired department was ever volunteer or, even, if our Deputy Mayor spent his youth there.) Or maybe, we want part time positions, no benefits; just dedicated folks coming in every now and then in between their other jobs in order to fill out the necessary paperwork.

If the city needs to be run like a business, doesn’t another shopworn cliché need to be trotted out? You get what you pay for.

Unsurprisingly, Deputy Mayor Holyday has run up against the stony wall of reality. New rules that he’s proposing to the Executive Committee this month “…would allow councillors to offload various costs, such as smartphone bills and office renovations, onto the general council budget,” Lorinc writes, “in effect freeing up more funds for other councillor office expenses.” Let the good times roll, folks. Bunny suits all round!

That’s right. In his search for further cuts to the ways councillors use their office expenses, the deputy mayor is, in fact, proposing to restore some of the cuts Mayor Ford made a successful campaign platform from. Could it be good sound bite politics that bash at the hornet’s nest of electorate anger turn out to be terrible policy ideas?

One of the items off the table for consideration, however, is any agreement to have the mayor sign off on councillor travel expenses. In his bid to rid the city of gravy, it seems the mayor thought it necessary for him to micromanage the oversight of $53,000. I’m not even going to bother to figure out that percentage of the operating budget, suffice it to say, it’s a ridiculously infinitesimal amount that would be a colossal waste of energy for a mayor of a major city to expend.

Of course, how long would it take for Mayor Ford to just rubber stand a ‘Denied’ across every request to reimburse travel expenses? We all know the mayor isn’t much of a traveller, except stateside for Florida jaunts and to take in NFL games. OK. There was that one time he went down to Mexico on official PanAm Games business but that was forced on him by the previous mayor.

If the mayor had his way, councillors would stay put here at home or pay for any trips on their own dime. It’s called city council for a reason. The city. Stay here. Do your job. There’s nothing to be gained, nothing to learn by spending your time elsewhere.

There’s certainly no need to be going to something like the Federation of Canadian Municipalities conference for example. That ‘lefty shmoozefest’ according to the Toronto Sun’s and Team Ford typist Sue-Ann Levy. Nearly one-quarter of Toronto councillors were in attendance when, surely, just Giorgio Mammoliti and an assistant to take notes and file a report would do.

What are other cities and their representatives going to tell Toronto that it doesn’t already know? Look after the pennies and the pounds will look after themselves. You need a weekend living large in Saskatoon to find that out?

Such continued myopia is a serious detriment to this city’s well-being. The mayor’s right hand man (or the mayor’s right hand man’s right hand man) is discovering the limits of cutting our way to fiscal health. Our structural deficit has little to do with bloat in the operating budget and everything to do with limited access to proper revenue tools outside of property taxes. Just like every other city in this province and in this country. Getting together at an annual conference to air out and hear ideas on how to go about fixing that can only help. Travel expenses for 11 councillors to attend is a very, very small price to pay.

But as we’re discovering, there is no price to pay that is too low to escape Mayor Ford’s notice. Every expenditure is suspect, every dollar must be contested. It gives the appearance of doing something substantive without really doing much at all.

on the cheaply submitted by Cityslikr


Budget Chief No

May 29, 2012

As we head into today’s abbreviated budget committee meeting with news of a $90 million surplus for the first 3 months of 2012, Budget Chief Mike Del Grande announces what any good, prudent, sane fiscal manager would. Hey, everybody! It’s party time! Let’s roll us back some sources of revenue. Woo-hoo!!

Or, as Elizabeth Church in the Globe and Mail phrases it: “He [budget chief] plans to push for a reduction of the land transfer tax in 5-per-cent increments beginning next year.”

Huh.

What?

Could you elaborate a little further, Mr. Budget Chief?

“He [budget chief] plans to push for a reduction of the land transfer tax in 5-per-cent increments beginning next year, arguing that the city cannot continue to rely on a revenue source that is tied to the fortunes of the real estate market…Mr. Del Grande says the city’s continued reliance on the tax will leave a ‘massive shortfall’ in its budget when the real estate market cools. ‘The land transfer tax is giving us a false sense of security’.”

O… K… Let me see if I follow the budget chief – who is a chartered accountant, don’t you know – follow his logic here. Because Toronto is experiencing a particularly hot real estate market, despite all the fear-mongering that the land transfer tax would kill people’s ability to buy a house, and is thus generating higher than expected revenues for city coffers, we need to start eliminating the source of revenue in order to wean ourselves off the LTT bounty in preparation for the time when we’re making less when the market cools? Sort of a voluntary reduction before the inevitable enforced one sets in?

Hmmm…

We really need to question Budget Chief Del Grande’s motivations. Or his competency.

Regardless of your position in life, whether a public sector budget chief, a private sector financial controller, an individual homeowner, in gazing into the future and spying a possible economic downturn on the horizon, who reacts with the suggestion to cut revenues? Batten down the hatches everyone! We need to start making less money now in order to be used to making less money later!

It makes no sense.

Don’t believe me?

Ask the city manager, Joe Pennachetti, himself a chartered accountant although, evidently, he secured his credentials at an entirely different school (of thought). In a talk delivered a couple weeks ago at the Munk School’s Institute on Municipal Finance and Governance and one we wrote about here and here, and Matt Elliott wrote here (yes, I do think it’s an important enough point to flog over and over until everyone knows it by rote), Mr. Pennachetti suggested that, while there were still efficiencies to be found, it was revenue generation that we needed to be talking about going forward. City building, whether infrastructure, transit, couldn’t be done through cuts or further efficiencies. Toronto, like every other city in this province, country, continent, needs new sources of revenue.

Of course, city building is not part of our current budget chief’s vernacular. I don’t think it too off the mark to suggest he’s more of the Grover Norquist/starve the beast type of politician. Taxation is bad. Therefore government spending is bad. Widows and orphans be damned.

Only hardcore right wing ideologues would suggest that, in this age of austerity, government look to reduce revenues.

Even if the budget chief demanded that any surplus be used to pay down capital debt, he’d gain some traction as trying to have a reasonable argument although not much of one. The city’s debt level is just fine, thank you very much. Credit rating agency Moody’s thinks so. The city manager thinks so (with one caveat: our social housing repair backlog). Any attempt to compare our situation to that of Greece automatically disqualifies you as a serious participant in this discussion.

Instead, Budget Chief Del Grande only raises the spectre of our capital investment debt to argue against both government revenue and spending. This year it’s: “Councillors who want to spend the surplus are forgetting the huge capital costs facing the city,” he [Del Grande] said, “including the multimillion-dollar tab for refurbishing the crumbling Gardiner Expressway.” Last year we had to cut services and programs in order to pay down the debt.

The budget chief needs to start coming clean with us and simply admit that he doesn’t think government should be in the business of governing. That way, we could cease pretending to have a rational debate on this point with him and get on with what we really should be discussing. Mike Del Grande’s unfitness to be overseeing our city’s finances.

fit of piquely submitted by Cityslikr


Voluntary Civic Participation

May 23, 2012

As I sat staring blankly at my Twitter feed yesterday, a Don Peat tweet retweet appeared on screen. It was from last week during the Executive Committee meeting debate on the motion to rescind the 5¢ plastic bag fee. “Budget Chief Mike Del Grande says city only made $18,000 from people wanting to voluntarily pay more tax.”

Having not attended the meeting, I can’t say what exactly the budget chief was getting at. People don’t like paying extra taxes? Voluntary taxes aren’t nearly as effective at revenue generation as mandatory taxes?

I shrug. A firm grasp of the obvious.

But it did get me to thinking about this idea of a voluntary contribution payment the city has going. I first heard about it at the public deputations during last year’s budget cycle from the budget chief in fact. On a couple of occasions he asked deputants who’d come to plead their case for not cutting this service or ending that program, given the opportunity, would they pay extra into the city’s coffers in order to fund the service/program of their choice. It was sentiment that got picked up by the likes of Councillor Frances Nunziata who’d bark out the same question at a deputant she found particularly annoying.

A motion to pursue this was passed by city council last September and by a surprisingly large 39-6 vote (item 3d) including all councillors I would consider to be of my political persuasion.

So let me just say this. It is vilely inane.

What it suggests to me is that if you think some service or program the city offers is worthy, open your wallet. Everybody else? We’ll just sit back and live off others’ largesse, counting our extra money while doing so.

It undermines the concept of community, for lack of a better term I can’t come up with at the moment. We’re not in this together. Everyone for themselves.

Why not follow this to its logical conclusion? The city sets up a tax bill and we simply check off stuff we want to pay for? As a very irregular car driver, I don’t want much of my money going to road maintenance. Instead, I’m willing to pay for more cycling infrastructure. And since I don’t depend on public transit, no cash from me goes to the TTC budget. My contribution will come via the fare box.

Now, that’s respect for taxpayers.

No more meddling by meddlesome politicians in trying to strike a proper balance. Money talks and bullshit city building walks. I’m mean, why oh why should I pay to maintain a fire department if I’ve never had a fire? On the flipside of that, if I really want to get my money’s worth, maybe I should torch my garage. I need to rebuild it anyway.

You see where this kind of free-for-all thinking can lead toward a very spiky city scape.

I, for one, think we get pretty good value for the money we give to our city government. Compared to my monthly private sector outlay to Rogers for the services they provide me? Yeah, I’m a pretty satisfied with what the city delivers.

Hell, compared to the return on investment I get from the senior levels of government, City Hall is a beacon of serving up a bang for my tax buck. From my personal experience, an overwhelming majority of taxes go to the feds and province in the form of income and sales taxes. The return I see is inversely proportional.

I know the historic reasons for such an arrangement and there’s certainly a lot to be said for Ottawa and Queen’s Park ensuring a level playing field for service delivery across the spectrum of their respective responsibilities – less so with each successive downloading of that responsibility – but this arrangement is long overdue for a revisit. The hierarchy has been turned upside down with the importance of cities to the entire country’s well-being grown to the degree it has. It seems the height of inefficiency sending the biggest amount of money the furthest away from where it’s needed, waiting for it to trickle down.

That’s the discussion we really should be having not haggling over how we divvy up an unsustainable slice of the taxation pie. There is only one taxpayer, it has been said. Yeah well, 80% of them live in municipalities that are increasingly coming up short of money needed to function properly. The only voluntary contributions that can change that fact need to come from our senior levels of government.

donatedly submitted by Cityslikr


Crisis? What Crisis?

May 17, 2012

It was surprisingly calm, Joe Pennachetti’s talk yesterday afternoon at the Institute on Municipal Finance and Governance. Serene, even. Reflections on Toronto’s Fiscal Health and the Decade Ahead: A Discussion with the City Manager. Toronto’s Fiscal Health? I mean, isn’t that sort of an oxymoron?

Nope, according to our City Manager we’re doing just fine, thank you very much. Still got that Double A credit rating. Our debt, hardly runaway, will peak at about 10% of our assets in 2015, a financial situation most of us personally would consider top notch. “We have a very healthy financial city at this point of time,” Pennachetti stated.

It belied the hysteria and apocalyptic noise we were subject to during last year’s budget process. And the year before that. And during the 2010 municipal campaign.

Come to think of it, Pennachetti’s presentation quietly pulled the carpet out from the raison d’être of the Rob Ford mayoralty. We have a spending problem, folks, not a revenue problem. Time to tighten our belts and Stop the Gravy Train.

(Are you as bored reading that as I am writing it?)

Now to be sure, the city manager was not averse to finding efficiencies, trimming whatever fat there was to be trimmed. The KPMG Core Services Review was his idea. Long overdue in fact. He thought it should’ve been carried out over two years not one (another sign there was never any need to hit the panic button the mayor and his allies so wanted push). Pennachetti was also onboard for the aggressive negotiating tactic we saw with the city’s workers earlier this year. Like the Deputy Mayor, he felt the city needed more control over scheduling and back end things like benefits.

Here’s the thing. If I heard the numbers right, the Core Services Review netted the city a savings of about $24 million. The labour savings? About $20 million. That’s on an operating budget north of $9 billion. Or about .5%.

I know everyone has different lines they draw. Count the pennies and the pounds take care of themselves. What’s 44 million when you’re talking billions? But a million here and a million there eventually adds up, etc., etc.

The point I’m trying to make here is those are numbers that don’t correspond to the tumult we witnessed arriving at them. No one’s suggesting finding $44 million in savings wasn’t valuable but was it worth the cost, not just in terms of money but the psychological and political warfare that preceded it? Forty-four million is simply a far cry from last October when the mayor in a speech to the Empire Club warned, Toronto’s financial foundation is crumbling. If we don’t fix the foundation now, our dreams for the future will collapse.

Mr. Pennachetti did want the assembled crowd to know that the $774 million number being thrown around at the beginning of last year’s budget debate as a spectre of this crumbling financial foundation was real. Yeah Joe, nobody ever disputed the veracity of that amount as an opening pressure. There was just a whole lot of disingenuousness in using it as the amount that needed to be cut from the budget, the shortfall needing to be made up. The number was nothing more than a scare tactic used by those wanting to cut more, to cut deeper.

Admittedly, it’s not all chocolate and roses. There are a couple ‘smoking guns’ as Pennachetti referred to them that the city needs to deal with to maintain the current fiscal balance. One is the ever increasing chunk of the budgetary pie taken by emergency services (TPS, EMS and fire department) and the TTC. The other is social housing, especially the eye-popping outlay of cash needed for the repair backlog at the TCHC, roughly three-quarters of a billion dollars.

But as the city manager pointed out, these are things we won’t be able to efficientize™ (Lucas Costello) or rationalize under control. In fact, in one moment of surprising frankness, Pennachetti expressed doubt there was more than $100 million in service efficiencies left to be found in the budget. There would be no cutting our way to a brighter, more prosperous future.

Which is where the 2013 budget debate (coming soon to the airwaves near you) is going to get really interesting. With precious left to cut, the city will be facing the need to approach balancing the budget in two ways Mayor Ford abhors. Going cap in hand to the senior levels or, as some might refer to it, hitting up a couple of fucking deadbeats for the money they owe us. Or we’re going to have to look at generating more revenue, ie raising taxes.

Consider these numbers.

If the province finally re-uploaded the cost of social housing and their half of the TTC operating budget — two things they used to be able to find the money to do – that would free up $550 million for the city which is nearly $100 million more than the estimated opening pressure for 2013. We would then start the debate in positive rather than negative territory. Any talk of cutting services, shuttering programs, finding efficiencies, layoffs would be moot.

That’s not going to happen, of course. Somehow we have found ourselves, alone in the developed world, in a position where senior levels of government contribute precious little to the well-being of their municipalities. They seem to believe that we’re not their problem and serve as little more than piggy banks, sending off money and getting nothing near the value for it.

That leaves us with no alternative but to look at different ways to generate revenue. Yes, raising taxes. This runs contrary to the mayor’s view that we don’t have a revenue problem but, let’s face it, that was an empty rhetorical tic from the get-go. Nothing more than wishful thinking on the part of a sizeable majority of Torontonians who let themselves be convinced that we were overburdened with taxation and under-serviced.

(Interesting observation from the city manager yesterday who said that if we took a picture of an average street corner, we could see at least 20 services the city provides us. Check out slide 4 of yesterday’s presentation to see just all the things you receive in return for the local taxes you pay.)

While the last two budget cycles have been all about austerity and cutting, there is very little left to excise — outside of perhaps the police services which is another topic the mayor will likely be unwilling to broach — without causing serious, irreparable pain that starts diminishing the quality of life in Toronto. It’s now time to start talking about building and growing and figuring out exactly how to pay for it. That’ll include some unpleasant words Mayor Ford doesn’t like to hear but it’s the direction he’s unwittingly taken us in.

supertramply submitted by Cityslikr