Tag Archives: Fiscal imbalance

Queen’s Park Strangers

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“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

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$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

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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