Meat or Gravy? Examining Toronto's city budget standoff

by Garry Green City Issues Columnist Ever since Rob Ford rode his way into the Mayor's office on campaign promises to rid City Hall of what he called the “Gravy train” of wasteful spending by city councillors, there has been continued debate over the true state of Toronto's finances.It has been described as on the verge of being in crisis from some on the right of the political spectrum, while those on the left say the problems are grossly exaggerated and the need for cuts are minimal. The truth is likely somewhere in the middle.
Courtesy Wladislaw/Wikimedia

While seeking election, Ford proclaimed that there was so much wasteful spending at City Hall that he would be able to balance the budget simply by getting it under control. He argued this could be done without cutting any significant municipal services.Here are some figures that should hopefully provide some clarity to the budget situation, though some exact numbers remain elusive.In spite of projecting a $774 million deficit for 2012, Ford decided not to increase taxes for 2011. He also honoured his promise to eliminate the vehicle registration tax, which removed $60 million from the city's revenue stream.In addition, the Mayor eliminated Transit City, which would have covered the City with Light Rail Rapid Transit lines, including a Finch line which would have served residents of the York West community. The cost of cancelling Transit City is projected to be approximately $65 million with nothing to show for it.Instead of Transit City, Ford favours a $3.7 billion extension to the Sheppard subway line and maintains that the private sector will pay for most of this. However, his appointee to secure private sector investment, Raymond Chong, said he believes that the private sector can cover only 10 to 30 per cent of the costs.The Mayor also insisted on a 10 per cent cut to all city budgets including library, Parks and Recreation and many others, but backed off on his insistence that the Police Department cut their budget. The police budget, is the most costly item at close to $1 billion of an allocated $9.383 billion city operating budget.Furthermore, the proposed 2012 operating budget includes a 2.5 per cent tax hike, a 10 cent TTC fare increase with decreased service on 62 routes. It also includes the closure of 10 of 22 ice arenas during daytime hours, as well as the closure of a number of swimming pools, including 5 wading pools, and proposes to cut more than 2,000 jobs.Ford has also proposed the phased elimination of the Land Transfer Tax which currently contributes approximately $300 million to city revenues each year.He had promised to eliminate it after the first year in office, but has now proposed to do it over his first term. His budget chief, Councillor Mike Del Grande (Ward 39), has chosen not to comment on the wisdom of eliminating this at a time of continued projected budget deficits.The city will also reduce grants to community groups and close three homeless shelters.What has become evident in the budget process is that there is a hugely divided council and decisions on both sides of the spectrum stem extensively from ideology rather than a clear understanding and interpretation of the figures.With three more years left on his mandate, it is clear that Ford is intent on putting his stamp on the city's future.Whether you may consider these changes are positive likely rests less with your understanding of the various numbers, as it does with the importance you place on a strong and viable public sector.Share your views on the direction that the Mayor and council are taking the City and its finances by emailing me at garrisontwo@yahoo.com