Archives

feature — Comments Off on Rob Ford misinformed on critical budget issues
18
Jul 11

Rob Ford misinformed on critical budget issues

The media outlets were maybe a bit too charitable with our mayor on Friday, as, in an interview with John Oakley on AM640, Rob Ford claimed that labour costs made up 80% of the city’s operating budget. In actual fact, that figure is about 48%. The disparity between the two percentages seems too large to be the result of a simple mental lapse or an exaggerated rounding error — it would seem, in this case, Ford was simply misinformed.

The discrepancy — paragraph six in the Star; paragraph eight in The Globe; paragraph eight in The Post; unmentioned in the Toronto Sun — is alarming because Ford was using his understanding of the city’s spending on labour to justify potentially laying off thousands of public sector workers.

The Globe & Mail’s Elizabeth Church and Jill Mahoney:

On the radio Friday, the mayor lamented that the city is spending 80 per cent of its budget on labour costs and vowed to bring that number down.

“In business, the first thing you look at is the labour and your labour should be making up, you know, maximum 20 per cent,” he said. “We’re at 80 per cent. It’s just unheard of. So I think that [we’re] taking a serious look at non-union and union employees and exactly what they’re doing and taking it from there.”

via Ford talks layoffs, suggests labour costs are four times too high — The Globe & Mail.

Cutting 75% of the City’s public workforce — about 50,000 strong — would mean laying off approximately 37,5000 people. Even assuming only half that number actually live within the borders of the City of Toronto, that still works out to an estimated 1.3% rise in Toronto’s unemployment rate. Regardless of whether these workers are providing necessary or efficient services, dumping that many people into unemployment would have disastrous impact on the regional economy.

Also alarming, and from the same interview, was the mayor’s seemingly sincere attempt to equate revenue cuts with spending cuts.

The Toronto Star’s David Rider:

Despite the layoff threat, Ford made balancing the 2012 budget sound positively easy.“We’ve saved over $70 million in the first six months so if we can find $70 million I’m sure we can save $700 million, that’s for sure,” Ford said.“So many great ideas are coming forward and then it’s for us to implement it. There’s tonnes of gravy,” he said, Ford’s pet word for waste.

via Ford makes layoffs sound like a certainty – thestar.com.

Many, including The Globe & Mail’s Marcus Gee, have pointed out that the $70 million in savings the mayor refers to is probably the same $70 million his office touted as “savings to the taxpayer” shortly after his first month in office. That figure included the roughly $64 million in revenue the City now must do without following the elimination of the Vehicle Registration Fee. Rob Ford, apparently, believes that eliminating government revenue counts as a “saving.”

To put it another way: this is the equivalent of taking a $100 bill, setting it on fire, and then calling that a “savings” on your monthly budget. Because now, I guess, you don’t have to worry about spending it.

The mayor was spinning these weird numbers — 80% and $70 million — as part of an attempt to to tiptoe around the idea of a 3% property tax increase for 2012. A reasonable property tax increase for the next year is actually the first sensible thing the mayor’s office has proposed in quite some time, so of course the Toronto Sun and others are already hammering him for it. Joe Warmington, in his column this weekend, accused Ford of replacing the Gravy Train with a Tax Train. (Seriously, enough with the damned trains.)

Which brings me back to this familiar refrain: property taxes don’t work like other taxes, in that they don’t grow automatically with inflation. A 3% property tax increase this year is in line with inflation — especially considering the freeze last year –, and really shouldn’t be seen as any kind of tax grab. Favouring layoffs over a fiscally-responsible move to keep the city’s property tax revenues in line with inflation is dangerous and short-sighted fiscal policy.

feature — Comments Off on Searching for Council’s conservatives
14
Jul 11

Searching for Council’s conservatives

Yesterday, Toronto City Council endorsed spending approximately $400,000 removing cycling infrastructure downtown and in Scarborough, despite staff reports that indicated the bike lanes had no substantive impact on traffic flow. They followed this up hours later by voting to uphold an earlier decision by the Executive Committee that, due to concerns that maybe someday the funding might be removed, Council not accept provincial money that would add two new public health nurse positions to the City’s payroll.

Let’s phrase that another way: over the course of one summer afternoon, councillors decided both to recklessly spend $400,000 for no clear reason and to play it safe, eschewing needed resources at public health because they might, one day — but probably not –, get stuck with a $200,000 per year bill for their trouble.

The same Council then had the relative gall to pass a motion calling for the province to step in and fund a greater percentage of the operating and capital budgets for the TTC. And so Council both rejected provincial money and asked for more of it on the same day.

Meanwhile, outside Council chambers, consulting group KPMG has spent the week releasing delightfully concise Core Service Review reports that all follow a similar template. First, they point out that the department they’ve examined has very little waste. Then, they drop a bundle of ‘considerations’ — not recommendations — that range from things like eliminating water fluoridation to selling the city’s stable of barnyard animals.

The consultants — who already have a checkered history with this kind of thing, having once produced a report arguing amalgamation would save the Toronto municipalities a significant amount of money — are clear that they aren’t even really looking at efficiencies as much as they’re laying out a list of things that could legally be cut from the city’s portfolio of public services. That this stands contrary to an election promise made by the mayor seems to have been tossed to the curb.

Also on that curb? The results of the city’s exhaustive consultation sessions regarding the Core Service Review. A full 60% of people who attended indicated they would accept increased taxes to pay for existing service levels. Councillor Denzil Minnan-Wong, who’s had a fun week, said Monday that that group was irrelevant. “Self-selecting,” he said. Okay.

For the record, Toronto — you know, the city that we continue to hear is suffering from near-fatal fiscal wounds that can only be treated by deep government cuts — has some of the lowest property taxes in the GTA and recently voluntarily reduced its annual revenues by $60 million.

I’m not sure what you call the ideology that drives these decisions, but it can’t be conservatism, can it? Certainly not principled conservatism. A conservative would demand to see a business case before spending public money modifying infrastructure. In the case of Jarvis, Birchmount and Pharmacy, there wasn’t one. A conservative wouldn’t turn away provincial money — which the city has said it needs –, especially if there was a guarantee in place that the new positions could be eliminated should the funding ever be removed. (Which was the case.)  A conservative wouldn’t call on the provincial government for funding only months removed from electing to decrease the city’s own revenues, and hours removed from opting out of committed, ongoing provincial money for public health.

Our Conservative Mayor

Early in the day on Tuesday — before Council had really started rolling with the big items of the week — Mayor Rob Ford rose and asked to be recorded in the negative on four items relating to grant funding for community groups, including Etobicoke Services for Seniors, the Crime Prevention Association of Toronto and Variety Village. (The latter is interesting, as it comes only a couple of months after Ford made a rare media appearance announcing a new bus stop implemented to serve visitors to the organization, which supports disabled children.) The Mayor also stated his intention to vote against grants for heritage buildings. Late in the day on Wednesday, the Mayor added to this bizarre tally, lodging a vote against the 2011 AIDs Prevention Community Investment Program. This vote marked a milestone for the councillor-turned-mayor: he’s now voted against AIDS funding five years in a row.

The bottom line: If the Mayor of Toronto could have his way, it would appear that the city would cease most community grants, end some of its heritage protection programs and drastically cut back on public health funding.

My kingdom for a conservative

I don’t lean even slightly to the right politically, but I would like to think I understand the merits of conservative thinking. It’s about mitigating government risk, off-loading ambition to the private sector and, in times of economic hardship, turning to austerity as opposed to reinvestment. That’s fine. As much as I disagree with that line of thinking on an ideological level, I respect it. I can hold it in my hands and argue against it. It feels firm.

But what we’re seeing at Council these days isn’t that. It’s a weird mishmash of spite-based decision making and conservatism-when-convenient, held up by the enthusiastic wishes of a “silent majority” that only communicate through the cellphones of the mayor and his brother. It’s all glazed over with a slapdash of pseudo-libertarianism, the kind that exists in the minds of high school students who are like halfway through reading Atlas Shrugged.

Rob Ford is Rob Ford. I can’t fault him for that. He’s maddeningly consistent in his anti-government views and has been for years. What disappoints me — and continuously surprises me — is that he has commanded the support of a cabal of once-sensible Liberals and conservatives on Council, and has driven them to this point where Toronto is now governed by a Council with no consistent guiding ideology, principles, or direction.

link — Comments Off on First Core Service Review report: cut snow-clearing, street-sweeping, fluoridation and recycling programs
11
Jul 11

First Core Service Review report: cut snow-clearing, street-sweeping, fluoridation and recycling programs

Cast your mind back to when Rob Ford, then a candidate for mayor, ran on a platform of austerity and service cuts, highlighting a need for Toronto residents to sacrifice things like regular street cleaning, water fluoridation and snow-removal in order to maintain Toronto’s lowest-in-the-GTA property tax rates? Remember that?

You might not, because it never happened. Instead, Ford ran on a platform that called for an end to “gravy train” waste. He told voters he would be able to save them $230 million on the 2011 operating budget, and ultimately produce a $1.7 billion surplus over his first four years in office, all without cutting services. The city doesn’t have a revenue problem, he was fond of saying, but a spending problem. And he could fix that.

Today, the campaign-era theatrics and slogans all came crashing down, as the Rob Ford administration revealed the first phase of their Core Services Review report. The initial release relates to programs that fall under the purview of the Public Works & Infrastructure Committee. It concludes that a  full 96% of the services provided by these city departments are absolutely essential. Nearly all the potential avenues for savings are listed as “small.” They include things like cutting down on the frequency of street sweeping, changing our standards for snow-removal, setting less ambitious targets for recycling and green bin programs and discontinuing the practice of fluoridation for the city’s water supply.

Councillor Denzil Minnan-Wong, Chair of the Public Works & Infrastructure committee, seemed to agree with media reports that claimed very few — basically none — of the report’s areas for consideration are actually plausible cuts, telling the Toronto Star’s David Rider and Paul Moloney that PWIC was not “a sweet spot” for easy savings. Which is decent enough logic, but if that was so obviously the case, why lead the multi-stage announcement of the Core Service Review reports with this document? Why not come out swinging with a report that highlights real areas for savings?

It might be because there is no such a report. This PWIC document identifies only $10 to $15 million worth of savings, which means the remaining seven reports — relating to committees like Economic Development, Parks & Environment, and Executive — need to contain considerations that average out to approximately $100 million in savings each to even begin to approach this year’s budget shortfall of $775 million.

As Torontoist’s Hamutal Dotan points out, the most glaring failure of this report is that it doesn’t even address the fiscal efficiency of how services are delivered, but instead jumps right to listing things that could be cut:

Which is to say, the administration directed its consultants to look for which programs it was allowed to cut, and by how much, without ever asking it to look at how it could maintain service levels by delivering them more efficiently. The underlying message of today’s report: if we want to cut the size of the budget, it will be, in the first place and not as a last resort, by cutting the scope of government.

via Waste Diversion, Fluoridation, and Cycling Infrastructure in First Round of Potential City Hall Cuts | Torontoist.

In other words: they’re skipping the gravy, and going right to the meat.

link — Comments Off on You get what you pay for
20
Jun 11

You get what you pay for

The Toronto Star’s Paul Moloney reported on the weekend that one in five respondents quit before completing the survey regarding the city’s core service review.

That’s not a crazy bad level of non-completition, but when added to the damning criticism the survey has received elsewhere, it doesn’t really do much to bolster confidence that the results gleaned from this exercise will be worth much.

Considering the importance of the work being done as part of this service review, why does the survey feel so flimsy? Turn out, as Moloney reports, that the city went for the bargain basement cheapest option:

Rather than use one of the better-known Canadian polling/survey companies, the city hired Utah-based Qualtrics.

City spokeswoman Deborah Brown said staff reviewed 15 online consultation tools and asked for quotes from Canadian polling firms but chose Qualtrics because it could meet the tight timelines and “the total cost was just 10-20 per cent of the quotes we received from the other companies.

via 1 in 5 gave up on city’s online survey before completing it – thestar.com.

A bid that comes in 80 to 90 per cent below your other comparables seems almost destined to be junk, doesn’t it?

Mark it: “You get what you pay for” is one of those phrases that will come around again and again through the Rob Ford years.

link — Comments Off on City looking at 10% budget reduction
10
Jun 11

City looking at 10% budget reduction

The Toronto Star’s Paul Moloney:

City departments that struggled to meet directives to slash 5 per cent of their annual budgets are now being ordered to double that, for a total cut equivalent to Toronto’s entire parks and recreation budget.

Cutting 10 per cent would save $375.9 million and go halfway toward filling the $774 million gap in the 2012 operating budget.

via City ponders the 10% solution – thestar.com.

This is going to be a bloodbath. Asking departments who just cut their budgets by 5% this year to look at a further cut of 10% is more than a little insane. We’re not a city with a declining population or a stagnant economy. We’re a city that enjoys low property tax rates compared to 905 municipalities and has been getting screwed by a bad financial relationship with the provincial government for more than a decade now.

We’re also a city that should be continuously looking to find ways to save money and create efficiencies, of course. The problem with this administration is that the Rob Ford campaign estimated that there were $230 million in potential savings immediately available in the city’s operating budget. Since taking office, they’ve only been able to identify a small fraction of that figure.

Bright side: Mike Del Grande seems committed to maintaining the land transfer tax. Without it, the city’s budget gap for 2012 would be more than a billion dollars. The Toronto Real Estate Board is mad about this. Duh.

link — Comments Off on Lame budget analogies
09
Jun 11

Lame budget analogies

Budget Chief Mike Del Grande is, to his credit, making a point of attending the consultation sessions regarding the city’s core service review. This is a good thing. Less good are the analogies he’s giving reporters.

Here’s what he told The National Post’s Natalie Alcoba:

“We’ve done all kinds of crazy things down here,” budget chief Mike Del Grande told reporters on Tuesday. “We’ve sold our furniture to pay the rent. We are no different than any family in Toronto who spends more than we earn. We need to get a second job. We would love to send our kids to camp, but it may not be the most nice camp. Or maybe the kids don’t go to camp at all.”

via City turns to citizens to solve looming deficit | Posted Toronto | National Post.

See, the thing about that example is that you have to follow it through. The city is a struggling family, sure. Let’s go with that. But last year the city did have a part-time job. It paid more than $60 million per year. The city quit that job.

The city also ended the past year with a bit of money in the bank. But instead of investing that cash or keeping it around for future years, it decided to use that money to pay for groceries. Worse, it decided to forego taking a salary bump at the job that pays most of the bills. So the saved money disappeared really quickly.

And, of course, the city said nothing to the kids about the possibility of not going to camp at the last big family meeting. In fact, the city promised the kids they would be able to go to the same camp like always.

All this to say: pretending that the operating and capital budgets of a $12 billion metropolis is equivalent to the budget of a suburban family with a dog and 2.3 children is ridiculous.

feature — Comments Off on Rob Ford, October 2010: “I will assure you that services will not be cut”
08
Jun 11

Rob Ford, October 2010: “I will assure you that services will not be cut”

Over at Torontoist, André Bovee-Begun does a hell of a job tearing through the online survey the city is pushing as part of their ballyhooed core service review:

One of the most striking features of the survey: respondents are asked, for any given service, whether “maintaining the quality is more important” or “lowering the cost to the City is more important.” Think the service should be improved? There’s no check-box for that. It provides another misleading set of choices when it asks respondents how they would choose to pay for any cost increases—via increased property taxes, higher user fees, or a combination thereof. Conspicuously absent: the array of other revenue-generating tools the City has at is disposal, such as the now-cancelled Vehicle Registration Tax or the Land Transfer Tax Ford has promised (but cannot afford) to cut. The survey simply chooses from among the full range of options the City could consider, and presents only some of these to the public for deliberation.

via Toronto’s Budget Survey Deeply Flawed – Torontoist.

He’s right, of course. The survey takes a subjective scenario — the city is totally broke and we must cut costs now or face doom! — and presents it as objective. If you believe, as many do, that the city has a revenue problem instead of a spending problem, there’s little opportunity in this survey to express that view. Worse, the survey seems to suggest that the city is clearly trying to do too much, something those who believe in city building definitely disagree with.

I think most people would probably fall somewhere in the middle, believing that there are surely places where the city can find savings but also that more of the money we send to the provincial and federal governments should return to us in the form of services. But even that view is difficult to express given the constraints of the survey.

If you don’t believe services must be cut, you’re crazy. Or so the story goes.

Hilariously, Budget Chief Mike Del Grande has taken to carrying around a plastic piggy bank to remind people that “we have a financial problem that we have to fix.” He speaks as if the city is on the verge of bankruptcy, even though the majority of this year’s budget hole comes from an ill-advised property tax freeze, the elimination of the vehicle registration fee, and mismanagement of the surplus dollars this administration inherited.  (Yes, the city has a structural deficit it needs to tackle but we could have at least made it through 2012 without too much wrangling.)

This week’s National Post Political Panel also looks at the survey and the public consultation sessions that came with it. Even staunch right-wing 905er Matt Gurney wonders about the wisdom of the mayor’s promise “to find hundreds of million of dollars’ worth of gravy while also promising no service cuts.”

Which brings up another point that I feel must be made continuously through this whole process: Rob Ford has no mandate for service cuts. None. As he probably told a reporter who was standing within earshot of the Toronto Star’s David Rider and Paul Moloney last October:

Although his rivals insist Ford’s savings can’t happen without reducing services Torontonians value — and he would need to somehow convince a majority of councillors to agree with his cuts — he insisted there is enough waste to make his fiscal surgery bloodless.

“I will assure you that services will not be cut . . . guaranteed.”

via Ford fiscal plan big on numbers, short on details – thestar.com. (Emphasis added.)

He broke that guarantee less than two months after he took office. And now he’s getting in gear to break it some more.

feature — Comments Off on There’s a hole in our budget
02
Jun 11

There’s a hole in our budget

The city is currently holding a series of budget consultation sessions in advance of a three million dollar “core service review” set to take place this summer. There’s also an online survey available. It’s structured such that you could, if you wanted, advocate that publicly-owned theatres are the only vital service the city provides, and also that fire services should be contracted out. Don’t do that, though. It’d be wrong.

I haven’t been to a session yet — I’m hoping to make it to the one taking place at City Hall on Saturday — but from what I hear they, like the survey, sort of play out like an elementary school brain teaser. As in: Oh no! The city’s former left-wing Mayor Goofus was addicted to spending and got us in a $774 million budget hole! Help the valiant new Mayor Gallant fix the problem by identifying services that could be cut!

There’s little about revenue generation strategies. Nothing about reinstating recently-cut taxes. Nothing about directing more of the tax money we pay to the provincial and federal governments toward urban initiatives like transit and housing. Instead, it’s a kind of civic Sophie’s Choice: pick the services you love least, because some of them are surely going to die.

Over at the Toronto Standard, Ivor Tossell sums things up nicely:

The whole thing is insane, in a relentlessly logical kind of way. It offers the solutions its framers want to pursue to a solve a crisis they had a hand in creating. Toronto! We may have to raise the taxes we just froze to replace the taxes we just axed to alleviate the apocalyptic financial shortfall we face every year that we just deliberately made worse! What shall we do? Feel free not to care!

via The Useful Hole | Toronto Standard | News, Media, Art, Business, Technology, Fashion, Events.

Similarly, in this week’s NOW, Ellie Kirzner has a nice summary of one of the recent public consultations at Danforth CI. She highlights just how much more challenging Ford’s handling of the 2011 budget have made preparation for the coming year:

Gord Perks sums it up: if Rob Ford hadn’t frozen property taxes, ditched the vehicle registration fee and frittered away the surplus, “we would be in a position where property tax increases just over the rate of inflation could have kept the ship afloat. Now we face significant tax increases or cuts, not because services cost so much, but because Mayor Ford really blew it in his first budget.”

via NOW Magazine // News / Rotten core.

I would never deny that the city has financial problems, but it’s ridiculously short-sighted to think we’re a few service cuts away from a long-term solution. Toronto’s problems are complex and resulted largely from a series of moves from senior governments that dumped operational costs on the one level of government that is legally prohibited from running a year-to-year deficit. The path to fiscal sustainability for our city lies not in service cuts — though we must always be vigilant about the services offered and the efficiency with which they are delivered — but rather in coherent, strategic negotiations between levels of government, resulting in a fair deal for Toronto.

Newer Entries →