Crisis? What Crisis?

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

Political Thoughts From The Love Shack

For those of you assigning my absence at this site to being lost in pursuit of pure and utter carnality, having last seen me being carted off a dance floor tucked under the arm of… how was it described.. ? “… one of the [statuesque] blondes just as Come Sail Away by Styx kicked into high gear”, allow me to set the record straight.

1) While it was Styx that played me out of the bar, the song was Lady not Come Sail Away.

2) The [statuesque] blonde in question is named Cerise and while she is on the tall side, statuesque may be somewhat hyperbolic. In bare feet, she is no more than 4 inches taller than I, and I am certainly not a tall man.

3) That most definitely was an impersonator of my person in this week’s comment sections. I have remained faithful to my vow of abstinence with KFC since the retainer incident. So I would hardly be gallivanting around the countryside with a bucket by my side. Also, I have no idea what a ‘speedball’ is.

4) Holed up as we have been in her quaint farmhouse all by its lonesome in the hinterlands of Dufferin County, our intercourse, as it were, has hardly been to the exclusion of anything outside of the primal kind. After all, we aren’t base animals, blind to all but our corporal desires.

In fact, over the past week, Cerise and I have discovered a mutual love of municipal governance and civic legislative structures. (I think this one may be a keeper!) Between mouthfuls of bonbons and tankards of merlot, we debated the merits of prescriptive versus permissive powers, the nature of the so-called ‘in between’ cities, the ridiculously inflated rock star persona of Richard Florida. And, of course, we both mooned over Saint Jane Jacobs.

More to the point, it was during a heated discussion about Thomas J. Courchene that I was struck by an idea that is pertinent to the discussion here over the last few days. In his June 2005 IRPP Working Paper entitled Citistates and the State of Cities: Political-Economy and Fiscal-Federalism Dimensions, Courchene suggests that, traditionally, municipal governments – deprived of actual fiscal and legislative powers by their respective provinces – have been little more than caretakers or purely administrative units. That is to say, doing the grunt work for their superiors.

Think the British Raj in India. Local government answerable ultimately to their political masters in a faraway place. Or to bring it closer to home, as Professor David Siegel has framed it, municipalities are merely vehicles for decentralized provincial service delivery. Provinces say “jump” and cities ask “how high”. From that vantage point, Rocco Rossi’s Empire Club speech should be seen as merely an extension of that mindset.

And who’s to say that the voters of Toronto don’t share Rossi’s point of view? If the newspapers and polls are to be believed, we no longer remain in thrall to Mayor Miller and his minions’ (again, borrowing from Courchene) ‘policy-intensive and participation/accountability-enhancing’ approach to governing this city. Perhaps, Rossi simply recognizes our latent desire to want someone else to tell us how to live our lives and therefore rid ourselves of the responsibility to accept the consequences of our own decisions. Maybe deep down in our heart of hearts, we Torontonians are simply of the administrative sort; reactive rather than proactive.

There’s no shame in that. Unfortunately, little excitement either. But hey, what are you going to do? Unburdened by responsibility, we have more leisure time to eat bonbons and drink merlot.

satiatedly submitted by Acaphlegmic

Standing On Guard For Them

An additional thought to my last post on Rocco Rossi and The Empire Club.

I wonder if candidate Rocco is aware of the irony in having given his maiden speech at an establishment like The Empire Club of Canada. Actually, I wonder if it’s ironic at all as there are times when I feel my grasp of the term ‘irony’ is no firmer than that of Alanis Morissette.

Rather than ‘ironic’ let’s call it ‘appropriately symbolic’ or ‘sadly unsurprising’.

According to its website, the club’s founders were well-heeled men; Souls for whom the wind is always nor’- nor’-west as British writer Rupert Brooke called them, poetically meaning of good fortune, I gather. They came together during the early years of last century in the face of a growing anti-English sentiment within the general populace and these men were nothing if not serious Empire Loyalists. It seems that Britain’s Lord Alverstone had voted with the 3 Americans who sat on the Alaskan Boundary Tribunal against the two Canadians. This resulted in the United States acquiring several islands plus a long stretch of coastline that became known as the Alaska Panhandle. In effect, handing over 210,000 square miles (or 543 900 sq. km. if my math is right) of northwestern Canada to the Americans.

Some Canadians were pissed about such British perfidy including then PM Wilfrid Laurier who demanded Canadian control over her own foreign affairs. This was downright uppity of the masses in the eyes of the nascent Empire Club of Canada set who seemed more akin to what they called “the Imperial bond” than they did their home and native land. So they formed a club (No Girls Allowed!) and got together for weekly dinners to listen to some speechifying extolling the virtues of the Empire and denigrating popular homegrown nationalist chest beating. For example, in the club’s own words: No aficionado of early Empire Club speakers could rightfully list those who impressed him without recalling the joy of discovering Captain A.T. Hunter…with an address entitled “The Fatuous Insolence of Canadians.[Bolding is mine.]

While the names and players have changed, it is the dynamics that haven’t with Rossi choosing the Empire Club of Canada as the place to kick off his campaign for mayor. The self-satisfied, entrenched establishment cheering on a reactionary, anti-populist office seeker who, if elected, promises to take the city back from fat cat unions, know-nothing bureaucrats and 44 other elected officials. Rossi vows to return the power to where it belongs: the monied back rooms.

So no, Rossi’s speech and location of it was not ironic. Pathetically apt, more like it.

true north strong and freely submitted by Cityslikr