All Fried Up In The Big Smoke

Less political. More fictional.

Shouldn’t You Be Dead If You’re Taxed To Death?

Posted on December 9, 2013 by "Brother" of Cityslikr

With the Toronto Star’s Tess Kalinowski reporting over the weekend that the Anne Golden-led Transit Investment Strategy Advisory Panel will be recommending some sort of corporate tax as part of an overall funding plan to start building transit, I say, good. Can we now start seriously discussing our transit needs and how to pay from them? Can we? Huh? Please?

One of the sticking points so far, at least for some progressive voices on the left side of political spectrum, was the very conspicuous absence of ‘A Corporate Tax’ option in the funding columns of either the city’s Feeling Congested and Metrolinx’s discussions earlier this year on revenue streams. This was a non-starter for many who legitimately wondered why individuals alone were being asked to shoulder the cost of new transit projects that would also serve to help the needs of the business community. An oversight, let’s call it, made even more fishy since one of the biggest cheerleaders for a massive regional investment in transit infrastructure was the Toronto Board of Trade.

Hey everybody (but our members)! We’re in this together (except for our members). Dig into your pockets and pay for the transit we so desperately need!*

But now it’s there on the table, and for anyone using its previous lack of presence as an excuse not to talk or even so much as consider a discussion about taxation as a means to fund transit expansion, well, time to step out into the open. Your cover’s been blown. I commend you for putting corporate taxation back into the mix but it won’t pay for everything. Let’s start talking turkey.

I won’t get into the nitty-gritty yet as the panel’s recommendations don’t go public until Thursday but let’s just say that my hope is that this can kick start a wider discussion beyond just transit needs to reclaiming the idea of taxation from its current status as some filthy word spat out in disgust.

At last week’s budget committee deputations, retired teacher Don Quinlan referred to Toronto as ‘a rich city that doesn’t act like it.’ That’s borne out by the fact residents of this city, on average, pay below the GTA average in property taxes. When given the opportunity to relieve pressure off the property tax base with other revenue streams, i.e. the Vehicle Registration Tax, we couldn’t elect a city council fast enough to repeal it. The Land Transfer Tax remains under constant threat.

For a generation now (at least), we’ve been trying to run a city on the cheap and then find ourselves surprised at the lack of good state of repair in almost every aspect of our infrastructure. Crumbling roads. Decrepit social housing. Bursting watermains. Substandard public transit. How did this happen, we ask ourselves, and immediately begin looking around for the easiest answers that won’t cost us anything. Lazy unions. Profligate spending. Inefficient bureaucracies.

To be fair, municipalities have been largely abandoned on many of these files by senior levels of government that operate, not at all coincidentally, on a similar Taxes Are Bad approach. Shit rolls downhill, leaving governments with the least amount of financial flexibility to deal with the ugly results. This has lead to a nasty zero sum race to the bottom with city councils facing tough either/or choices between vital services and programs. Public housing or public transit? Child care or after school programs?

The grim situation, however, only gets exacerbated when we mirror such anti-tax sentiment. Clearly, many self-proclaimed fiscal conservatives believed our tax intolerance was not such that we’d mind an annual half percent property tax hike to pay for a Scarborough subway extension. So let’s keep that conversation going. What else is on our wish/to do list?

Enough already with the burden of taxation. At this point, we’re getting exactly what it is we’re willing to pay for. We either accept that and live with it without complaining or we start putting our money where our collective mouth is. Anything less than that is a shirking of our responsibility and just plain flat out freeloading.

— seriously submitted by Cityslikr

*excluding Board of Trade members

Welcome To The Hot Seat, Mr. Budget Chief

Posted on September 4, 2013 by "Brother" of Cityslikr

Anybody else pause a moment reading the Toronto Sun’s Don Peat write that our budget chief, Councillor Frank Di Giorgio, suggests the process of balancing the 2014 operating budget might ‘require a few miracles’? The man in charge of the $10 billion (more or less) purse strings casts an eye heavenward in hopes of some divine intervention to make sure revenues match expenditures because actual math might not do the trick this time round. Fingers crossed. Say your prayers. Hope there’s a rabbit to pull out of the fiscal hat.

I’m sure it was just an expression and the budget chief isn’t really that concerned. He has no choice but to balance the budget. The province mandates that he does so. It could even be he’s simply ramping up the concern, clearing the way for either service cuts or tax increases as necessary in order to meet the zero bottom line. He won’t be the first budget chief to do so.

But it could also be that Councillor Di Giorgio, in his first kick at the can as budget chief, is now staring into the hard reality of Mayor Ford’s voodoo economic model for running the finances of the city. Cut revenues, cut the gravy but whatever you do don’t cut services the public actually wants. Those are much tougher numbers to crunch. And if all that easy waste wasn’t nearly as prevalent as the mayor claimed?

Well, that’s enough to make any budget chief look for a little guidance from the big guy upstairs.

The almost impossible task the budget chief faces was made glaringly apparent at yesterday’s budget committee meeting. City staff reported a $58+ million projected surplus after the 2^nd quarter of 2013, made up largely of bigger than expected revenues from the Land Transfer Tax and money saved from unfilled staff vacancies, now in excess of 2500 positions including in vital departments like Human Resources, Planning, Health and IT. In order to keep the city in the black, it seems, the budget chief is going to have to keep that tax revenue coming in and maintain a freeze on making new hires.

The problem arises, however, when his boss wants to reduce that particular tax by 10% and preserve the façade of putting customer service first and foremost which entails keeping departments properly staffed up. Cut revenue and increase costs. It’s a difficult equation to keep in balance. Less money in + more money out = the same 0 it has to be every year.

To be fair to this administration, not filling staff vacancies – ‘gapping’, to use the euphemism — didn’t start in 2010. It has been an ongoing issue for some time now as an unobtrusive way to keep costs contained that isn’t immediately felt by the general public. A slight delay here. An unreturned call there. An accumulation of neglect owing to fewer and fewer bodies present to do the jobs that need getting done. Kicking the can down the road, essentially, in the name of fiscal prudence.

Things become acute however when such gapping is combined with a downward pressure on revenues. Never mind hiring to fill in the gaps. The gaps just get bigger, deeper.

Under questioning from councillors, City Manager Joe Pennachetti admitted that maybe they had cut a little too much in the Human Resources department at City Hall over the last few years. So there aren’t enough people to hire other people in other departments. The gaps just get bigger, deeper.

Team Ford stalwart and budget committee member Councillor Frances Nunziata tried to suggest that many of these unfilled vacancies were unnecessary management positions that didn’t affect front line services. The city manager gently disagreed, saying the bulk of the vacancies were front line workers. He will deliver a report to next month’s meeting setting out the numbers in more detail.

But it’s hard to believe that the 36 vacancies in the planning department, say, are unnecessary management type positions. The understaffing in that vital department has long been decried, going back to at least the Miller years if not before but it’s staggering to think that it’s continuing all during the building boom that the city has been experiencing, not to mention the fact that we’re also reviewing our Official Plan… with a depleted planning department.

The city manager did point out that Toronto isn’t the only municipality experiencing problems hiring qualified people to fill its bureaucratic ranks. Competition is tight from competing cities as well as the private sector. It’s not as easy as just topping up your human resources department and telling them to go out and get hiring.

It’s going to take opening the wallets up and creating a desirable work place environment in order to successfully recruit candidates here. Both conditions seem to be the exact opposite of how the current administration operates. Dedicated to the best customer service that the money we refuse to spend can buy.

If that unworkable kind of Dr. Doolittle, push me-pull me approach wasn’t evident to the budget chief before yesterday’s meeting, it certainly should be now. How he’s going to straddle that divide, God only knows. So far, there’s no indication the budget chief does.

— celestially submitted by Cityslikr

Credit Not Where It’s Due

Posted on July 11, 2013 by "Brother" of Cityslikr

This is not Mayor Rob Ford’s debt. Don’t give him the credit. He doesn’t want it. He doesn’t deserve it.

As was pointed out in at least a couple corners (Matt Elliott here and Rob Granatstein here) yesterday, the Toronto Star’s headline, tagging the mayor with the increase in debt for capital spending was misleading at best, flat out wrong at worst. The city sets out a 10 year plan for capital expenditures which it adjusts annually. Incoming administrations inherit capital plans (and costs) from the preceding one and can only tinker so much with them. Such is the case currently. Mayor Ford took on much of the debt run up by the Miller administration.

AND THERE’S ABSOLUTELY NOTHING WRONG WITH THAT!

Among other things, the city is getting a new fleet of transit vehicles including much needed streetcars rolling out next year as part of the capital spending that’s lead to the debt. This is neither unusual nor a bad thing. Governments, businesses and individuals rarely purchase big ticket items with cash up front. It makes no sense to do so especially with things that are going to be used over long periods of time like streetcars.

But almost all government spending is anathema to politicians like Mayor Ford. Debt is a red flag to him, proof positive that the gravy train chugs on and wasteful liberals are out of control. Since becoming mayor, he has done everything in his power to roll back the city’s debt including diverting money from the operating budget to pay off capital purchases outright.

(Everything, that is, outside of ensuring a proper revenue stream. There was a compelling argument as part of Matt’s Twitter stream above that by reducing revenue in the form of freezing property taxes and cutting the VRT, Mayor Ford had, in fact, contributed to the growing debt. That’s not an unfair assessment.)

While certainly there is a bump in the city’s debt load currently, in looking over the various 10 year capital projections, you get a sense of, if not an overall decrease in debt, a definite flat lining of it. I think it’s safe to say that the mayor has successfully wrestled our debt to a stalemate. Done his best to put a lid on it.

Hold your applause, folks.

There’s nothing admirable in the mayor’s approach to debt. There’s nothing even remotely fiscally responsible about it. As was pointed out today in the probably not left leaning magazine, Canadian Business, congestion could be costing the GTA as much as $11 billion a year. Congestion caused by decades and decades of inaction on transit building.

And as was pointed out to us by the undeniably non-partisan storm on Monday evening, our sluggish investment in infrastructure under our streets is costing us millions and millions of dollars as well. “We’re hanging on by a thread,” said our debt-averse mayor in reaction to the damage inflicted by the heavy rains. Shut off your lights and power down your computer. Half measures, long after the barn doors’ been kicked from their hinges, called for by a mayor unwilling to spend the money on real solutions.

The truth of the matter is, in his obsessive drive to reduce government to little more than a police force that keeps our roads paved and clear of anything but cars and trucks, Mayor Ford is limiting our chances in dealing with some serious changes that have already arrived while we’ve been pretending not to notice. Councillor Janet Davis pointed out that over a billion dollars was cut in the 10 year capital plan for the city’s Wet Weather Flow Program in this year’s budget.

What’s that you ask?

“Toronto’s Wet Weather Flow Master Plan (WWFMP) is a long-term plan to protect our environment and sustain healthy rivers, streams and other water bodies. And it’s about reducing the adverse effects of wet weather flow, which is runoff generated when it rains or snows.”

“The adverse effects of wet weather flow…” Ring a bell for anyone whose basement flooded Monday or who hoped to go for a swim in Lake Ontario this weekend before this week’s massive sewage dump? Adverse effects? What adverse effects?

Earlier this year, Councillor Denzil Minnan-Wong, chair of the Public Works and Infrastructure Committee – the committee that oversees much of the substantial, debt-inducing spending that helps keep the city up and running properly – floated an idea to cap the revenue brought into by the Land Transfer Tax. It was intended to be a compromise between the mayor who wanted the tax eliminated entirely and those councillors who saw it as an important piece of the budget puzzle. The net effect, if it had been adopted by council (it wasn’t), would be to ultimately reduce city revenue.

We’re hanging on by a thread, and our mayor and chair of one of the most important committees in terms of building for the future are busy figuring out ways to generate less money. As if somehow, magically, leaving more money in the pockets of taxpayers will rebuild aging infrastructure and new transit lines and not simply rewrite the formula for inaction that it’s been for decades now.

So stop trying to discredit Mayor Ford with our increased in capital debt. It’s none of his doing. He hasn’t earned such praise.

— tightly submitted by Cityslikr