The Simple Truth

June 23, 2016

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? tellmewhatiwanttohearFor 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.deaf 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…” youdontsay1So, 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. parrotToronto 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. texaschainsawmassacreThe 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


Benign Neglect Is Still Neglect

November 11, 2015

At a press conference yesterday (a ‘press avail’ in journalese), Mayor Tory announced that progress had been made in reducing the 2016 police budget. mayorjohntoryOf course, when it comes to the police budget, reduced actually means less of an increase. So, an original ask of 5.8% knocked down to 2.76% works out to be a decrease in the police budget. It’s what we call ‘progress’!

The day before, on Monday, the TTC budget committee met, and in discussions about proposed waterfront transit projects, seemed ‘resigned’, in the words of the Globe and Mail’s Transportation writer, Oliver Moore, to some sort of people moving walkway linking Union Station to Queen’s Quay. Yeah, an escalator rather an actual vehicular link like the one that was favoured here, way back in 2013 (h/t Matt Elliot). Why? A serious lack of capital funds. No money.

This is Mayor John Tory’s Toronto, folks. Where police budgets continue to rise despite evidence showing crime statistics declining. nomoneyPublic transit budgets keep growing too but not enough to accommodate the increasing ridership numbers that continue to go up despite a less than optimal service, let’s call it.

Mayor Tory’s Toronto.

To be sure, this isn’t all on him. He’s only officially held the office for some 11 months. Bloated police and insufficient public transit budgets most definitely preceded him.

But the mayor wears this current Police Services Board. The former chair, Alok Mukherjee, left the position before his term was up, and replaced by the mayor’s buddy and former chief of staff, Andy Pringle. Upon assuming office, Mayor Tory dumped the only black member on the TPSB, Councillor Michael Thompson, and took his spot on the board. The new police chief, Mark Saunders, is his choice.

So, yeah. The 2016 police budget belongs to Mayor Tory.

And as the TTC struggles to maintain proper levels of service and plan future transit projects, Mayor Tory has dropped a huge turd into the proceedings, his election campaign ready SmartTrack. whitewashingDraining money and time resources from city and TTC staff, the plan is no less fuzzy and ill-formed than it was when it was pitched for votes some 18 months ago. Reports on it have been delayed. Ridership models adapted to work it. There’s no lid tight enough to contain the stink coming from the project.

None of his gestures toward the TTC, bus service bumped back up to 2011 levels, free transit for the kids, are making any dent in the pressures weighing down on the system. So the ongoing problems facing public transit in this city are now Mayor Tory’s problems.

Is there any reason to believe that he’s up to the task of dealing with them?

His full on commitment to seeing SmartTrack through, regardless, seems nothing but self-serving, an eye solely on re-election in 2018 rather than improving transit for the city. He’s spent much more of his political capital (not to say a lot of the city’s actual capital) catering to the perceived needs of drivers, speeding up repairs on expressways, keeping others elevated for absolutely no reason aside from optics. Being modestly more transit-friendly than the previous administration in no way should be perceived as being any less car-friendly.

On the policing front, Mayor Tory’s wading in to the carding issue was a complete and utter fiasco. He got bailed out temporarily by the province who redirected the focus onto themselves as they figure out how to try and reconfigure regulations. sweepundertherugHis TPSB chair dropped the ball on a KPMG report on police budgeting that’s been on or near the table (depending on who you believe) for nearly a year now. Chair Pringle, in responding to questions about why the report hadn’t been made public yet, referred to it as an ‘internal think document’. “Random suggestions aren’t necessarily something that we report back on,” the chair said.

Mayor Tory has subsequently suggested the KPMG report be made public but not in time to have any impact on this year’s police budget. A budget that will be increasing again despite how the mayor’s office tries to spin it. An increase is an increase no matter how small an increase it is.

Given the current crisis level climate in the city toward its police services, with the laughably light penalty given to the only office convicted of a G20-related crime and the ongoing trial of Constable James Forcillo in the shooting death of Sammy Yatim, Mayor Tory’s not rock the boat approach seems wholly inadequate. The additional strain of his SmartTrack plan on an already over-stressed transit system is the exact opposite. Unnecessarily burdensome in a white elephant kind of way.

This is a mayor completely tone deaf to the reality of the city he was elected to lead. He preaches steady stewardship but practices little of it. whatsthatTimid when he needs to be bold. Heavy-handed when required to be conciliatory. Wanting to be everything to everybody, Mayor Tory is proving to be nothing to anyone.

If the Ford Administration was a reaction to the instability Toronto now faces, brought about by unequal access to income, mobility, opportunity, Mayor Tory’s soothing can-do cheerleading in no way addresses that instability. It doesn’t even provide a band aid. It’s the blank, toothless smile of a nothing to see here sensibility that focuses all its energy looking back over its shoulder instead of at the rocky road ahead.

impatiently submitted by Cityslikr


A Mayor In Major Minor

October 2, 2012

Today marks the start of what is, I believe, the 4000th city council meeting Mayor Rob Ford has presided over since taking office back in 2010. (I use the mayor’s own arithmetical tools to arrive at that number.) Looking through the meeting’s agenda the thing that immediately jumps out at me is the complete and utter lack of positive input coming from the mayor and his Executive Committee. It’s almost as if he’s mayor in title only.

Where are the major initiatives? The bold going-forwards that will set out directions to deal with the city’s pressing problems? Mayor Ford? Oh right. It’s high school football season.

Anyone else? Councillor Ford? Deputy Mayor? QB Mammoliti? Anyone, anyone? Bueller?

Instead, this is what’s shaping up to be the defining moment of this week’s council meeting. “When Toronto city council kicks off its fall session this week,” Kelly Grant wrote in the Globe and Mail yesterday, “Mayor Rob Ford will have a real shot at a real win on a real issue. If the mayor’s allies succeed in postponing or reversing a plastic-bag ban that Mr. Ford has derided as ‘outright stupid,’ he will have something to celebrate after this summer’s gaffes.”

That, folks, is what you call setting the bar really, really low.

Reversing a vote which was the result of a vote that should’ve never happened in the first place as the key to rebuilding Mayor Ford’s relevance? Halting a ban on single-use plastic bags after successfully nixing the 5 cent fee that had been imposed and which many major retailers still charge can really be classified as ‘a real win on a real issue’? What next, maestro? Watch as our mayor drinks a glass of water while his dummy talks.

Read a list of the examples Mayor Ford will cite as his administration’s major accomplishments to date – cutting councillors’ office budgets, removing the VRT, contracting out waste collection, getting the TTC deemed an essential service, setting city workers’ contracts and avoiding any threat of a strike for 4 years – a pattern emerges. Under the guise of restoring fiscal sanity and respecting the taxpayers, it’s all been about cutting, reducing, eliminating. Getting government out of the business of governing.

I Cut, Therefore I Am.

Of course, none of this comes as much of surprise to anyone who watched Rob Ford during the decade he spent as a city councillor or crunched the numbers he casually tossed around as part of his mayoral election campaign platform. However else he tried to couch it in terms palatable enough to lure a plurality of Toronto voters to back him in 2010, it was always just about less. Less government. Less spending. Less taxes.

Then he ran smack dab into the hard, cold reality of municipal governance as set out in KPMG’s Core Services Review. It wasn’t really all that gravy laden down at City Hall. Efficiencies could be found certainly but nowhere near enough to offset the loss in revenues that Mayor Ford demanded in tax cuts and freezes. No matter how many different ways you tried to do the math, the answer was always the same.

Now comes the report from the outgoing Deputy City Manager and CFO, Cam Weldon, outlining a transit funding strategy. Requested in March by city council, it is chock full of ideas on revenue generation to pay for the massive investment in public transit that the city and region must undertake, and undertake ASAP. ‘Revenue generation’ you say? You mean, taxes!

Yep. It’s going to take a whole lot more than reversing the plastic bag ban for Mayor Ford to become relevant again. Transit is but the tip of the iceberg of infrastructure investment cities are facing. Ducking your head and clutching your wallet is no longer a viable option. More is the new less, and being the mayor of small things won’t be worth one lousy nickel.

generously 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


The Nub Of It

February 14, 2012

“Getting to the nub of it.” 16h06m at yesterday’s Executive Committee meeting, after Gordon Chong’s ‘Toronto Transit: Back on Track’ report on the Sheppard subway extension had been delivered and the debate and discussion raged, famously loquacious Councillor Michael Thompson bid everyone to cut to the chase and get to the nub of the matter at hand.

People want subways, people.

OK, fuck. You know what? You big bunch of crybabies want a subway so bad, fine. Extend your fucking Sheppard subway, east, west, both. I don’t care. You refuse to listen to reason. Hell, Dr. Chong, D.D.S., gave us permission to stop paying attention to experts which I’ll remember next I go to the dentist and am told the sharp, shooting pain in my back left molar is a cavity that needs to be fixed. Nah, you know what, doc? My gut tells me the searing sensation is more a respiratory affliction. The tooth only hurts when I breathe. Vicks VapoRub should do the trick.

It’s like dealing with a two year-old’s temper tantrum. Red faced, hands over ears, screaming at the top of their lungs, stomping both feet on the ground. We want a subway! You have a subway! Why can’t we have a subway?! We want a subway!! We want a subway!!

But here’s the deal. The Eglinton LRT stays as is according to the Transit City configuration city council voted to re-install last week. Underground where necessary, above ground where possible. That means all the way west of Keele and east of Laird above ground. To bury it all the way takes valuable transit from both Sheppard and Finch Aves. That’s a little bit selfish on your part to demand otherwise, wouldn’t you say?

Secondly, you want a subway, start talking congestion fees, tolls and all the other vehicle fees and levies that KPMG floated as possibilities (Table 26, page 85 of the report) for filling that glaring funding gap staring up at you from the pages of Dr. Chong’s report. Oh yeah, that’s right. No matter how shiny a spin he put on the concept of the public-private partnership that would build the subway for a fraction of the cost estimate delivered by the TTC, even with the bestest of best case scenarios with everything falling just perfectly into place, there was still a great big chunk o’ change shortfall. Nearly a billion dollars to be exact.

Seems Mayor Ford was a little off in promising to build your precious subway completely with private sector money. Not possible. The report from his own handpicked representative says so, unequivocally if a little sneakily.

So which promise will the mayor have to break? Not build subways or not jack up fees and charges for car owners? He can’t not not do one without not not doing the other. Or.. wait.. he can’t not do one without doing the other.. or he can’t do one without not doing..

It’s all so confusing. Is the War on the Car over or not? Because it’s now crystal clear to everyone but the most wilfully obstinate: the Sheppard subway extension can only be delivered with the help of a basketful of increases to the cost of operating a private vehicle in this city. Anyone claiming otherwise is simply being dishonest and spinning a fantasy, regaling the electorate with a fairytale.

If Mayor Ford and his subway supporters are so sure that he was elected on a mandate to build subways, that the people want subways, I challenge them to run a serious poll question. Would you prefer subways to LRTs if it meant a substantial increase in fees paid to own and operate a private vehicle? Frame it in a way that best captures the reality of the situation, that gets to the nub of it, you might say.

If a majority responds, hells yeah!, well then, we have ourselves a completely different situation than the one Mayor Ford is currently trying to convince us of, where subways can be built at no extra cost to the already put upon taxpayers of Toronto. We can all join with the suddenly Big Idea conservative caucus at city council who normally take any and every opportunity to lambast the former Miller regime for its political overreach, and build us a real, first class transit system with subways running everywhere, up and down, back and forth and beyond, even if it doesn’t make a lick of technical sense. People want subways, people. They’re even willing to pay for it.

And if they’re not? If they answer in the negative to the question, Would you prefer subways to LRTs if it meant a substantial increase in fees paid to own and operate a private vehicle? Well, sorry. You can’t have your subways. That’s not just me, a downtown, subway hoarding elitist telling you no either. Gordon Chong, his associates and the good folks from KPMG have put it down in writing. You want subways? Fine. It’s going to cost you. Until subway fans are willing to grow up and face that most unpleasant of facts, and start talking openly about new taxes and fees instead of referring to them euphemistically and obliquely (transit revenue tools) as if by not saying the dirty words out loud, it doesn’t really count, then all this is merely a diversion, a big ol’ waste of time and resources. Cheap, political grandstanding that has already set transit planning in this city back decades.

sick and tiredly submitted by Cityslikr