Tag Archives: Vehicle registration tax

The Truth Is Easier

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(This is an earlier version of a post first seen at Torontoist this week. It was recently discovered in a bottle found floating somewhere near Union Station.

If you tell the truth, you don’t have to remember anything.

— Mark Twain

Since the municipal campaign heated up in 2010, Toronto has been existing in a fiscal alternative reality. City Hall was a painted as a place full of tax-and-spend, corrupt politicians, held captives by unions with rivers of debt turning our streets blood red. Businesses were fleeing. Graffiti blighted the skyline as far as the eye could see.

But fear not, good citizens taxpayers. A fix would be easy. A nip here, a tuck there. A round of some good ol’ fashioned belt tightening. All done with no service cuts…guaranteed. We’d be good as new in no time.

That virtually none of that nonsense rhetoric held any water was hardly the point.

Our credit rating was just fine, thank you very much. Corporate and condo towers were rising up at a record rate. Toronto continually found itself with high rankings on international lists of liveability and business friendliness.

But one time fringe councillor Rob Ford and his small band of right wing ideologues convinced enough voters to get himself elected mayor that his version of reality was true. Stop the Gravy Train! And the assault on fact, veracity and just basic high school economics has been ongoing ever since.

One of the first signs that we’d been had came when the Ford administration filled the holes in its inaugural budget using a more than $300 million surplus left behind by the previous mayor, David Miller. Wait, what? David Miller? That profligate David Miller? A surplus? But…but…?

Not so fast, folks, Team Ford told us. It wasn’t a surplus. It was a ‘one time savings’. Those are two entirely different things.

Then we had another surplus—errr, one time savings. And another. And just this past week, another surplus—errr, one time savings was announced for the first quarter of 2012.

So, I have to ask: How many one time savings does it take to make a surplus?

In the real world of municipal government financing here in this province, cities are prohibited from running an operating budget deficit. So they tend to over-estimate their projected costs and downplay possible revenue. Surpluses are not at all unusual or one time. In fact, they are a sign of sound fiscal management.

Now, it can be argued that sometimes city staff is a little too conservative with their estimations and present a more dire situation than is really the case. This prompts an over-reaction from some politicians who demand unnecessary cuts and reductions in order to meet the bottom line. It’s a problem that has been exacerbated (in this writer’s opinion) here in Toronto by council’s decision to get a budget done as close to a calendar year as possible while the actual wheels of finance and commerce operate on an April-to-April fiscal season. A time lag is created, with more uncertainty, more guesswork and more conservative estimates.

In the face of these continued occurrences of one time savings (annually, like clockwork), Mayor Ford has been forced to make some tough decisions. Like cutting services. Oops. Yeah, about that guarantee…

Well, first of all, the mayor would appreciate it if you stopped calling them cuts because they’re not cuts. They’re efficiencies, and he never guaranteed not to find efficiencies. In fact, he guaranteed he’d find efficiencies.

Besides, to the mayor’s way of thinking, you can’t have a surplus if you owe money, and while municipalities aren’t allowed to run operating budget deficits, they can rack up a whack of capital debt. Cities have to build and maintain things like roads and a public transit system and it turns out that shit is expensive. How else are you going to pay for it other than using any and all operating budget surplus—errr, one time savings? The bigger this one time savings, the more capital debt you can pay down. In order to increase a one time savings, you need to trim here and there on the operating side of things.

So, you see the dilemma Mayor Ford’s facing. The only other alternative to using operating surpluses to offset capital costs is debt financing. And as Councillor Doug Ford suggested at Tuesday’s budget committee meeting, debt is the first step toward bankruptcy as anyone who’s ever taken out a mortgage knows.

Imagine all the things we could have if we weren’t paying interest for the things we need. Our budget chief pointed out that the city saved $20 million on interest charges last year. That’s almost a third of the amount we lost by repealing the detested vehicle registration tax a couple years ago. It’s also a drop in the bucket of cash we gave away by freezing property taxes in 2011 and not making up the difference in 2012.

The trouble with debt, in the eyes of Team Ford members, is that you need to generate revenue to pay it off. Generating revenue is just another term for taxation, and a civil society cannot function properly under the burden of taxation. Government should not be in the business of generating revenue because generating revenue is the business of business.

This is the worldview we’ve allowed to permeate throughout City Hall.

No debt. No revenue. No expenditures except for in the service of those first two rules. That this is inherently contradictory and mathematically impossible seems utterly lost on the people pursuing and advocating these policies. But the one lie—errr, piece of campaign hyperbole – that this city was going to hell in a hand basket and our fiscal foundations were crumbling – served as the little piece of thread that, once pulled, unravelled the entire outfit. One invention led to another two being needed to prop the first up, and so on and so on.

The truth is much more economical. If we’d had an honest and straight-forward discussion from the beginning, that the city was facing some challenges, some very serious challenges, but was in a strong position to deal with them, we wouldn’t be wasting our time and energy, digging through the mounds of falsehoods and illogical that now makes up the debate at City Hall.  We wouldn’t be constantly reminding the mayor and his supporters that what they said then is miles away from what they’re saying now. The target we’re shooting for wouldn’t constantly be in motion.

— cross my heartedly submitted by Cityslikr

An Empty Mandate

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The timing of this is absolutely going to come across as pure sour grapes. Two days after being snubbed, left on the cutting room floor by the Globe and Mail’s Marcus Gee in his article about Toronto’s City Hall bloggers and tweeters, here I go about to attack him. But let me just say in my defence that I think Mr. Gee did me a favour. In hindsight the decision to let fly with my impressions of various councillors during our interview was probably ill-advised.

“I used to beat up twerps like you in high school,” I bellowed at Mr. Gee, bringing my Councillor Giorgio Mammoliti A-game to the table. “Give you wedgies and dunk your head in the toilet bowl.”

Yes, as a matter of fact, I really do need to re-think my PR strategy.

Besides, this won’t be the first time I have disagreed enough with the Globe columnist to write a response. In fact, it was pretty much on this very same issue that I expressed my displeasure with him back in March, long before we ever chatted in person. Just so we’re clear on my motivations here.

On Friday, Marcus was at it again, bemoaning the aimless drift of the city under Mayor Ford’s watch. “After a string of whuppings on transit, Mr. Ford is looking more and more isolated on the council he is supposed to lead,” Mr. Gee wrote on Friday. “With two and a half years left in his four-year term, his ability to implement his agenda is fading. That may strike many Torontonians as a good thing. It’s not. For one thing, a city with as many pressing challenges as this one can’t afford to drift rudderless till 2014.”

OK, again. Just because the mayor appears to be drifting aimlessly does not mean the city is. The mayor is one component of municipal governance, a very important component certainly, the only council member elected city-wide and with slightly better access to the levers of power, but still only one vote of 45 ultimately.

Mr. Gee rightfully characterizes Mayor Ford’s last few months as a display of ‘abysmal leadership’ which should be his story, end stop. A mayor is elected to lead, in Toronto is given some tools to help further an agenda. After a year or so of doing exactly that, this mayor has ceased performing that function. No one has taken it away from him, tied up him ‘with a thousand tiny bonds’. He’s just continually failed to muster the majority of votes needed to win crucial votes at council. There’s nobody to blame but himself and his staff for that.

And yet, the business of the city carries on. While Gee sees last week’s council vote on contracting out cleaners as a victory for those looking “… to handcuff the city’s attempts to get private contractors to take over some cleaning jobs…” and some sort of plot by ‘a resurgent left wing’ on council “…to block any attempt to contract out services to private companies”, that’s an angle seen purely through an ideological lens. Councillor Ana Bailão, who put forth the motion, stated right up front that it wasn’t about stopping the practice of contracting out. She wanted better oversight of how and to whom the contracts were given.

Her motion seemed to be largely in reaction to the mess that emerged back in 2010, before Rob Ford was even elected mayor, with the contracting out of cleaning services for Union Station. The possible use of undocumented workers, not paying them the agreed upon hourly wage and a questionable renewal of the contract all suggested the city needed to be more vigilant in its contracting out process. As we go further down that road, Councillor Bailão’s motion looks more like a strengthening of safeguards rather than merely putting on the brakes to a mayoral initiative.

While Mayor Ford’s former press secretary and now Toronto Sun something or other, Adrienne Batra, sees the same leftist plotting and nefariousness at City Hall as Marcus Gee, she puts the blame for its success squarely where it belongs: in the lap of the mayor. “The mayor — not his staff, not his brother, not his executive, not his unpaid advisors — needs to dig down and find the same passion for the job he had when he was first elected,” Batra writes, “to carry him through the remainder of his first term. That is, if he wants a second one.”

A second term?! What on earth would Mayor Ford do with another 4 years? He doesn’t even know what to do with the next 30 months.

Both Ms. Batra and Mr. Gee miss what, I think, is the major cause of the mayor’s sudden flirtation with irrelevancy. His 2010 election platform was the thinnest of thin gruel. Because it was exclusively based on unfounded rhetoric and almost impossible to implement promises, there was no way it could sustain one term, never mind two. To the city’s fiscal detriment, he pushed through the repeal of the Vehicle Registration Tax and kept property tax increases below the rate of inflation. The savings from his major accomplishments of cutting councillors’ office expenses and securing concessions from city workers without any labour strife don’t appear to cover the loss in revenue from the tax cuts and freezes which doesn’t bode well for another campaign promise of the mayor’s, eliminating the Land Transfer Tax.

Mayor Ford did get the ball rolling with contracting out waste collection and nothing in Councillor Bailão’s successful motion last week threatens that. Hopefully, it will serve to alert not only city council but the public also to the possible problems that come with contracting out. If we’ve learned nothing else from the last 16 months or so, it’s that the easy peazy manner of running a city the mayor promised was pure delusion. We do, in fact, have a revenue problem and the spending problem that was so out of control? Yeah, not so much.

When a politician romps into office based on such out-and-out fantasy, it’s hardly surprising that he, sooner rather than later, gets bogged down in the mire of reality. Marcus Gee implores city councillors to ‘let’ Mayor Ford get ‘at least some things done.’ I’d suggest they already have and are now hard at work trying to mitigate the fallout of having done so.

— not bitterly submitted by Cityslikr

A Debate 3 Months Too Late

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Do you hear that? The low humming, ever so slight grinding buzz? That’s the sound of triumphal ideological bluster awkwardly changing gears into reverse. It’s not particularly noisy or grating. In fact, there’s something quite soothing about it. Not yogic in its serenity. More like the summer cicada song, lulling us into a soporific state of waking slumber.

A motion to defer and rethink new recreation field user fees for the yout’ of Toronto was put forth by Mayor Ford yesterday and passed unanimously as did amendments from councillors Janet Davis and Paula Fletcher, an almost unheard of case of accord at city council during the Ford era. And as welcome as the situation was – consensus, that is, not necessarily the details which deserve another post entirely – it was deadly fucking boring. Conflict sits at the heart of good drama, yes? For those of us used to some 16 months of never ending, monumental struggle, it all felt like such a drag, man.

What’s good for the city is bad for city hall watchers?

Much of the anticlimax had to do with the vote result being pretty much a foregone conclusion. The story of new fees coming down on the kiddies of the city (‘a children’s tax’, Councillor Raymond Cho called it) to use Toronto’s playing fields took on such negative resonance that even the mayor thought it to be untenable. Either untenable or just another very likely black eye loss that he didn’t need to face at the moment. So get out there ahead of the curve on this one. Respect for the taxpayers taking a backseat to the widows and orphans out there.

But quite frankly, most of the air got sucked out of chambers because councillor after councillor stood up to defend themselves for letting these user fees see this much daylight in the first place. Notionally, if you voted in favour of the 2012 budget back in January, you voted in favour of bringing in these new user fees. Many of the 39 councillors who had given the amended budget a thumbs-up wanted to clear the air as to why they did what they did. Mea culpas and/or finger pointing get a little tedious after a while.

Here’s the thing.

This has been pretty much 2 years or so in the making. If you elect somebody as mayor who spent the entire campaign claiming he could cut waste, cut spending, cut taxes without cutting services or programs or facilities, well, new user fees shouldn’t really come as much of a surprise to anyone. Add to this that after burning through a previous year’s surplus and ridding city coffers of revenue by eliminating the VRT and pronouncing loudly and relentlessly that Toronto’s fiscal foundation was crumbling, any budget proposal was going to be chock full of user fees. It’s just basic math.

Besides, with the libertarian streak that runs deep in the mayor, a You Use It, You Pay For It ethos pretty much goes without saying. Unless of course we’re talking about driving private vehicles. Then hey, it’s all for one and one for all. Mi camino es su camino, si hermano?

Yet Mayor Ford flinched on this one. Along with his brother, the deputy mayor, budget chief and all the other fiscal conservatives who screamed bloody murder back only two months ago that such profligacy at City Hall was a thing of the past. We were dangling at the end of our spendthrift rope. Financial wrack and ruin were awaiting us if we didn’t zip up our pockets and start looking after our pennies, every single dime, yaddie, yaddie, yaddie.

We’d burned down the banana stand, folks.

So we needed to step back, take some time for careful consideration and reflection. Unlike during the full court budget process press when it was all hands on deck, grab the pails and start baling because the good ship SS Toronto was sinking into a sea of red. Everybody, and we meant everybody, needed to start pulling their weight. There would be no more freeloading under this mayor’s watch.

Yesterday’s change of course altered the dire landscape, it seems. Mayor Ford claimed that there was new money from all the sweetheart labour deals he’d swung with city workers. However much that might be putting the cart before the horse, even if true, what happened to all the talk of paying down our oppressive debt with any extra cash we found under the cushions? Isn’t the $1.5 million that’s now being waived for kids to use our sports field ‘gravy’ according to the Frugal Times dictionary?

And how will this decision affect budget debates going forward from here? It’ll be difficult for the administration to cry poor when other ‘special interests’ step up, Oliver Twist like, mewling for more. Please… sir… you found $1.5 million for them. What about us?

Of course, with the mayor already heading into campaign mode, it probably means that we’ve turned the corner on this. It’ll be all good news for us from here on in. We slayed the debt dragon, folks. Broke its proverbial back. Everybody said it couldn’t be done. We did it.

Re-elect Mayor Ford in 2014.

— belatedly submitted by Cityslikr