In the 21-hour marathon session of the city’s executive committee last week, councillors heard from the public to not act on any of the cost-cutting opportunities identified in auditor KPMG’s review. However, the committee has voted to have all options on the table for their September 19 meeting.
In a media briefing last Friday, Budget Committee Chair and Ward 39 councillor Mike Del Grande stressed that the city was considering KPMG’s report, not carrying out all the proposed cuts.
“Everything is on the table for discussion,” he said.
Since municipalities are not allowed to run deficits, the council is required to balance the books for next year.
At the media briefing, City Manager Joe Pennachetti maintained the $774 million funding gap in next year’s budget, calling it “the largest opening budget challenge we’ve had since the amalgamation.”
Councillor Michael Thompson of Ward 37 also held firmly onto this figure in an interview.
In a media briefing last Friday, Budget Committee Chair and Ward 39 councillor Mike Del Grande stressed that the city was considering KPMG’s report, not carrying out all the proposed cuts.
“Everything is on the table for discussion,” he said.
Since municipalities are not allowed to run deficits, the council is required to balance the books for next year.
At the media briefing, City Manager Joe Pennachetti maintained the $774 million funding gap in next year’s budget, calling it “the largest opening budget challenge we’ve had since the amalgamation.”
Councillor Michael Thompson of Ward 37 also held firmly onto this figure in an interview.
But Mike Layton, councillor for Ward 19, said that $774 million may not represent Toronto’s actual challenge, if previous surpluses are factored in. “Until we go through the actual budget process, we’re not going to know exactly how much of a shortfall we’re having,” he said.
Layton criticized Mayor Rob Ford for axing the vehicle registration tax, which led to a $64 million decrease in city revenues.
He also objected to the freezing of property taxes and TTC fares, noting that Toronto has one of the lowest municipal property taxes in the GTA.
Thompson defended the mayor’s decision to eliminate the vehicle registration tax.
He said that, while it was always good to have more money for the city budget, Ford was simply delivering what he had promised during his election campaign.
Brian French, a well-known policy advisor and strategist in Toronto, characterized the budget as an annual struggle to balance the books.
He believes that the city’s problems go 30 to 40 years back, even before the amalgamation.
“[Toronto] failed to appreciate what its mission is,” he said. “Its mission is to provide services on behalf of the province of Ontario.”
Layton criticized Mayor Rob Ford for axing the vehicle registration tax, which led to a $64 million decrease in city revenues.
He also objected to the freezing of property taxes and TTC fares, noting that Toronto has one of the lowest municipal property taxes in the GTA.
Thompson defended the mayor’s decision to eliminate the vehicle registration tax.
He said that, while it was always good to have more money for the city budget, Ford was simply delivering what he had promised during his election campaign.
A Problem Decades in the Making
Brian French, a well-known policy advisor and strategist in Toronto, characterized the budget as an annual struggle to balance the books.
He believes that the city’s problems go 30 to 40 years back, even before the amalgamation.
“[Toronto] failed to appreciate what its mission is,” he said. “Its mission is to provide services on behalf of the province of Ontario.”
The city took on a bigger role than what it was set up to do, he said. And the burden was placed on the backs of property tax payers, since the city had no other means of raising revenue.
He also mentioned how the city and province traded programs in 1990s. Though the trade was dollar-for-dollar at the time, the city ended up assuming responsibility for programs that grew more costly at a faster rate.
Layton seemed to have similar views, though he blamed the higher levels of government for forcing the city to take on more responsibility than its funds could cover.
He was especially critical about TTC funding. “We’re consistently the only country with a decent public transit program that doesn’t have federal funding for the operation side of it,” he said.
Thompson said the city’s problems may stem from its size and complexity, both of which were amplified after the amalgamation.
He blamed the federal and provincial governments for causing more costs due to the “more downloading that is taking place to the city.”
However, he noted that budget issues were not unique to Toronto but rather a “universal” problem.
French said that many city services in fact should be paid by the provincial or federal governments, who have greater sources of revenue. He named social housing, special events funding, theatres, and resettlement costs, and welfare to be among these.
He used the example of hostels, which were “a need the province wasn’t fulfilling.” Instead of going to the province and presenting them with angry electorates who weren’t receiving enough funding, the city started paying for those services from its own budget.
This “ready-shoot-aim” approach would’ve worked only if the city could charge an income tax, instead of laying the burden on homeowners, he said.
Layton, too, believed in more contribution from higher levels of government. “We should be always going to the province to say you got to deliver your promises,” he said.
He said that higher levels of government received more taxes, but didn’t deal with huge programs like affordable housing and waste collection.
“For every dollar that Torontonians pay in taxes to the federal and provincial governments, we’re getting 8 cents back,” he added.
He hoped the city would look at congestion fees and tolls—not to implement, but to consider before ruling them out.
Budget Chair Mike Del Grande said he personally believed cuts were the last resort in treasured services like the Toronto Public Library. “The question becomes: can we operate them more efficiently,” he said.
In the case of the Riverdale Farm, another controversial opportunity for cost-slashing mentioned in KPMG’s report, Del Grande suggested finding ways to increase profit. He mentioned possibly charging a parking fee and a $1 to $2 entrance fee, as well as breeding some animals for a local farm.
The city council will be looking at the User Fee Review and the Service Efficiency Studies to help make its decisions. These two reviews are parts two and three of the Service Review Program, which began with KPMG’s Core Service Review.
The conclusion of the Efficiency Studies will happen concurrently with the budget direction for 2012, said City Manager Joe Pennachetti.
Councillor Layton said Toronto should keep delivering the services “that make the city a great place to live in.” He hoped efficiencies could be found, but if they could not, he still believed the city should find a way to pay for its services.
Councillor Thompson said that it was “appropriate to access” the options in the KPMG report.
He stressed that the city council must examine the impact of its decisions, and to make choices based on “factual information, and not simply rhetoric.”
With files from Matthew Little
He also mentioned how the city and province traded programs in 1990s. Though the trade was dollar-for-dollar at the time, the city ended up assuming responsibility for programs that grew more costly at a faster rate.
Layton seemed to have similar views, though he blamed the higher levels of government for forcing the city to take on more responsibility than its funds could cover.
He was especially critical about TTC funding. “We’re consistently the only country with a decent public transit program that doesn’t have federal funding for the operation side of it,” he said.
Thompson said the city’s problems may stem from its size and complexity, both of which were amplified after the amalgamation.
He blamed the federal and provincial governments for causing more costs due to the “more downloading that is taking place to the city.”
However, he noted that budget issues were not unique to Toronto but rather a “universal” problem.
Possible Solutions
French said that many city services in fact should be paid by the provincial or federal governments, who have greater sources of revenue. He named social housing, special events funding, theatres, and resettlement costs, and welfare to be among these.
He used the example of hostels, which were “a need the province wasn’t fulfilling.” Instead of going to the province and presenting them with angry electorates who weren’t receiving enough funding, the city started paying for those services from its own budget.
This “ready-shoot-aim” approach would’ve worked only if the city could charge an income tax, instead of laying the burden on homeowners, he said.
Layton, too, believed in more contribution from higher levels of government. “We should be always going to the province to say you got to deliver your promises,” he said.
He said that higher levels of government received more taxes, but didn’t deal with huge programs like affordable housing and waste collection.
“For every dollar that Torontonians pay in taxes to the federal and provincial governments, we’re getting 8 cents back,” he added.
He hoped the city would look at congestion fees and tolls—not to implement, but to consider before ruling them out.
Budget Chair Mike Del Grande said he personally believed cuts were the last resort in treasured services like the Toronto Public Library. “The question becomes: can we operate them more efficiently,” he said.
In the case of the Riverdale Farm, another controversial opportunity for cost-slashing mentioned in KPMG’s report, Del Grande suggested finding ways to increase profit. He mentioned possibly charging a parking fee and a $1 to $2 entrance fee, as well as breeding some animals for a local farm.
The city council will be looking at the User Fee Review and the Service Efficiency Studies to help make its decisions. These two reviews are parts two and three of the Service Review Program, which began with KPMG’s Core Service Review.
The conclusion of the Efficiency Studies will happen concurrently with the budget direction for 2012, said City Manager Joe Pennachetti.
Councillor Layton said Toronto should keep delivering the services “that make the city a great place to live in.” He hoped efficiencies could be found, but if they could not, he still believed the city should find a way to pay for its services.
Councillor Thompson said that it was “appropriate to access” the options in the KPMG report.
He stressed that the city council must examine the impact of its decisions, and to make choices based on “factual information, and not simply rhetoric.”
With files from Matthew Little
