Monday 5 December 2011

The Budget Question and Answer Segment

So since this budget has been launched some people I run into have been asking me some general questions about it. It's easy to get details confused by hearing snippets in the news here and there, so if you need to catch up this question and answer segment with an imaginary Ford supporter is for you. 

So I heard about this budget and it doesn’t sound that bad. After all, with a few cuts the $774 million deficit is taken care of. That’s good right?
The $774 was never the real number, it was the opening budgetary pressure. As this Wellesely Institute chart shows, this opening pressure is similar to the number for each of the past five years. The difference is that the previous administration chose not to publicize the opening number because they didn’t want to alarm the public. This administration chose a different approach for strategic purposes.
From the Budget Committee via the Wellesley Institute Countdown to Zero Report

Well the Miller years used lots of scare tactics too, like threatening to mothball the Sheppard subway line.
OK, this ‘but Miller did it’ argument is pretty intellectually shallow. Weren’t those the tactics Ford decried in the campaign? Miller was wrong to use those tactics and so is Ford.  

But the point is, the Ford proposal balances the budget. We can all be proud of that.
I suppose. That’s a pretty low standard though; the city is legally required to balance its operating budget each year and has always done so.

OK, point taken. But the Mayor said he found $355 million in savings and efficiencies. That’s impressive.
It might be if it was true. The Mayor gets that number by adding up all his service cuts, layoffs, unfilled vacancies and projected budget adjustments. It’s the latter that is crucial. The ‘savings and efficiencies’- service cuts, really- total $88 million and the balance ($267 million) are adjustments to previous budget estimates.

That is, they aren’t real savings at all. They are either more accurate (downward) budget projections or service cuts.   

That sounds a bit different. But Ford inherited an awful mess and clearly he’s doing the best anyone can expect.
Rob Ford inherited a $346 million surplus from David Miller. As Edward Keenan explains nicely in this piece, Ford used the surplus last year to pass tax break goodies. He cancelled the $60 vehicle registration tax that generates $60 million, and froze property taxes and TTC fares. Since the latter two need to rise with inflation to have the same value, these were decreases in real terms. If those items rose with inflation and the VRT was kept, they would have generated $300 million over two budgets.

Not only that, but Ford is balancing this year’s budget with an extra $83 million leftover from last year’s surplus. What it adds up to is a healthy financial cushion that Miller had built up and Ford took advantage of in a one-time binge last year without planning for this year.

Put another way, Matt Elliott has a chart on the subject. Everyone likes pictures. 

Well at least Ford is making those necessary cuts that Miller was afraid to do. That takes courage and conviction.
Also keep in mind that thing about ‘no service cuts...guaranteed.’ To break that promise requires- how shall we say- moral flexibility. But further to the point, these cuts are not necessary. After inflation-level increases on property taxes and TTC fares the budget generates a $139 million surplus while the total cuts are $88 million. So Ford could keep his zero service cuts promise (aside from the Urban Affairs library) and still have a surplus to put in reserves.

OK, but Ford also promised to avoid touching those one time unsustainable surpluses to fund the city’s business, and that’s what he’s saying here.
It’s curious how he uses that argument to justify the service cuts he wants but neglected it when funding his tax cuts, isn’t it?

Oh, and in that same budget last year, Speaker Frances Nunziata was instructed by the Ford Team to forbid any mention of planning for this budget. So all of this ‘planning and prudence’ rhetoric is a bit rich.

Point taken. But the cuts aren’t all that bad. I mean earlier we were talking about closing libraries or bus routes full time and shutting down tons of wading pools, but it’s only a handful.
Ah yes, the ‘well this could have been worse’ argument, ably analyzed by Cityslikr over at his blog. First of all, I guess how bad the cuts are depends on who you are. If you’re a minimum wage worker who relies on the already crowded Dufferin and Finch buses you’ll be paying more for what will somehow be worse in time and crowding. That 'well this could have been worse' argument probably doesn't feel that great. Or if you live near one of those libraries that have 12 hours cut a week, that might be some quality time reading to your son or daughter that you lose. And while no libraries will be shut down like last year, 20,000 hours will be cut which is the equivalent to the 9 smallest libraries closing full-time. Not only that but there will be 150 fewer staff members compared to last year, a number that the chief librarian has referred to as unsafe for current programming levels. Or there’s the wheel trans service if you have dialysis, the wading and swimming pools, the nutrition programs that serve 14,049 kids, the drug prevention programs...

I get it, I get it. And my heart bleeds for all these cuts, it really does, but shouldn’t a lot of those be the province’s responsibility? I mean, we’re just doing what’s right for Toronto.
Yeah, that’s a fair argument to make. Things like certain pools should be covered by the school board and social programs like shelters for the homeless should be funded by the province. That’s a debate worth having. For now, I’d feel more comfortable maintaining those programs while negotiating with the province. Our primary responsibility is to our citizens, not our budget.

I wouldn’t quite phrase it that way, but agree to disagree. But one thing that really gets me going is this property tax hike. And the TTC too. This is awful, and I can’t believe Ford broke his promise.
Not quite- Ford never promised no tax increases. As Dylan Reid explained a couple years ago in a must-read Spacing article, property taxes are only an increase in real terms when they go above the rate of inflation. And 2.5% is a reasonable estimate for the rate (in fact last year was an unusually high 2.9%). As for the TTC fare increase, between labour, fuel and infrastructure maintenance, the TTC’s budget increases above the rate of inflation each year and this really can’t be controlled. A 10 cent fare increase just maintains the inflation rate and if we wanted flat fares we would have to triple the proposed TTC cuts. It’s unfortunate that service has to be cut while enacting a fare increase, and that’s something that I strongly disagree with. Based on this Grid interview with the TTC’s Chris Upfold, I’m guessing some TTC brass do too. 

Well I support the Ford layoffs. I mean, that’s something that’s long overdue. We have more employees than at amalgamation and a lot of them are deadwood. Good riddance.
Any large bureaucracy- including the private sector- has de-motivated or underused employees that could move on. But make no mistake, these layoffs will have an impact on service. In particular, the Fire department is already running behind expected times by two minutes, street cleaning will be impacted although that was a campaign priority of Ford and parks will see a dramatic reduction. For more, read Matt Elliott’s post debunking the idea that the city has an out-of-control employee count across the board. 

Well according to Ford’s presentation 54% of the growth since amalgamation belongs to Police, EMS and Fire. So there’s redundancies there.
It’s a lot harder than it seems. The fire department has dangerously low levels, with fewer employed than at amalgamation. EMS has increased their headcount by 150 the past 13 years but their response times are poor. The overwhelming amount of this growth has come from the police department (the budget has almost doubled in this time period), which Ford proved unable to cut this year. It’s with good reason too; the province mandates a certain level of police officers and provides money for each position. With 85% of the budget tied up in labour costs, it’s impossible to make a dent in the budget without impacting the front lines. When Bill Blair said he would have to fire 1,000 officers (just under 20% of the force) to meet Ford’s arbitrary 10% target, he wasn’t kidding.   

OK, but at least Ford is doing what he can. He leads by example, cutting his own office budget and all those silly little perks councillors get.
That’s true, he has cut his office budget. But when we get down to this level, it’s really just symbolism. It’s nice to take a close and critical eye at each budget line but with an operating budget close to $10 billion cutting snacks for councillors is pretty meaningless.

OK wiseguy, what bright ideas do you have?
Well Jack Diamond of Diamond + Schmitt Architects has a nice column in the Globe arguing for re-zoning parking lots to encourage better planning and improving economic development. It’s something that would give more developers more flexibility, make land more valuable and discourage car dependence (which also means decreasing congestion).

Toronto has a much lower rate for development charges than other areas $9,000 compared to $29,000 in Oakville, for instance. This is due to how the provincial formula is calculated which I’m going to investigate in a future piece, mainly because I don't get it. But it sounds like there’s room to change it there.

Also, that deluxe leaf pickup and windrow clearing sounds suspiciously like gravy.

But mainly, we need to look at alternative revenue sources in conjunction with the province, ensure they upload the services they promised to and push hard on 50/50 subsidies for TTC operations like we used to have.

OK, so let me get this straight. Rob Ford inherited a massive surplus last year, spent it all on tax cuts while not allowing people to talk about next year, has another smaller surplus this year that would still cover all services but insists on not touching it this time while having service cuts or eliminating entire programs for the TTC, libraries, the arts, programs for children, youth, seniors, the homeless, people with AIDS and HIV, 2300 fewer city workers, less street cleaning and snow clearing and dramatically decreased budgets to all city departments except the police and planning?
Um, yeah.

Where can I learn more about the budget and how can I participate?
The city website is a great place to start. This has all of the documents you need to go through.  In particular, make your way through the analyst notes on the 2012 operating budget.  If you want to compare to previous years, just change the year in the address bar.

Also, go to the budget meetings on Wednesday and Thursday at City Hall. There should be lots of people there from 9:30 AM- 9:30 PM both days. Sign up here by Tuesday at 4:00 to make a deputation by e-mailing the address in the top right. If you do so, direct your remarks towards Chin Lee, Michelle Berardinetti, Frank Di Giorgio and John Parker. These are the more moderate councillors who are relatively open-minded.

Also, follow the #topoli hashtag on Twitter, Matt Elliott’s blog Ford For Toronto, Cityslikr’s All Fired Up in the Big Smoke blog, the Openfile, Torontoist and Spacing coverage and the reporters from the four dailies. There’s some other great blogs and columns out there, but I can’t list everything.

Also, e-mail or call your councillor- you can find out who they are here. Ask them questions, develop a more informed opinion, offer suggestions. (You can check out how they vote by looking at Matt Elliott's awesome scorecard here.)  In particular, speak with councillors' Executive Assistants. They can offer really good suggestions for what you can do and any one of them worth their salt should get back within 24 hours. If you want to speak on specific issues within the budget, they can point you in the right direction. 

For particular issues, some councillors are more helpful than others. A quick rundown:

General budget questions: Shelley Carroll and Gord Perks probably have the best understanding of the budget's intricacies on Council. Both answer Twitter questions regularly (@shelleycarroll and @gordperks) and are approachable and accessible at City Hall. 

Arts: Recently swing vote Gloria Lindsay Luby introduced a 20,000 strong arts petition at council and Jaye Robinson (@jayerobinson), another crucial swing vote, is also a supporter. Most any defense of arts programs for council votes needs them behind it. 

Wading Pools and Pools: Swing votes Josh Matlow (@joshmatlow) and James Pasternak (@jamespasternak) were both vocal in support of funding for TDSB pools as trustees, Matlow saying that confronting the issue motivated him to run for council. 

Children's Nutrition Programs, other programs for children: Janet Davis (@janet_davis) and Kristyn Wong-Tam (@kristynwongtam) are both on top of these issues, Davis in particular. Josh Matlow and Michelle Berardinetti (@councillorMB) are the point people defending the Toronto Youth Cabinet. 

Libraries: Libraries will probably have a lot of changes in their reductions between now and the final budget. For now, library board member Jaye Robinson will play a key role. She's a defender of libraries and also a supporter of increased corporate sponsorship. 

TTC: This impacts pretty much everyone, so it makes sense to focus on your region. If you live in North York, tell swing vote James Pasternak how you feel about the Finch bus whereas if you live in midtown contact swing vote Josh Colle to discuss the Eglinton service. If you need background, get in touch with opposition Councillor Joe Mihevc, who I'm sure would be happy to share his thoughts on the TTC and who to speak to. 

Layoffs: Ask your local councillor how this will impact services in the area and what strategies are being used to maintain service. 

With that, I hope you understand the budget slightly better.  

More questions? Criticisms? Leave a comment. 


  1. A few gentle exceptions I took;

    - Nobody in the Ford administration has used the 'Miller did it' argument (yet). They've simply said, "This is how WE are going to do it."

    - I appreciate them publishing the true budget numbers. I understand that Mayor Miller was simply trying not to panic us, but it's not smart (or right) to spoon-feed the masses when the number is that big.

    - Arguing that the VAT, etc., would have GENERATED money is just mean-spirited. That is money that comes out of my pocket, and it's NOT cool.
    We pay enough in tax already - but if there MUST be a tax increase, at least Ford's is honest - "We're raising your taxes," not sneaking in a punitive tax on drivers alone.
    (To be completely fair, that may just be a matter of perspective, but I'd say all politics comes down to perspective - and to dismiss someone else's perspective on their own wallet doesn't help us take you seriously)

    - The fact that Nunziata, etc., were forbidden from talking about a fact most certainly does NOT negate the fact's presence.
    (In short, just because one doesn't talk about planning & prudence does NOT mean there was none.)
    You can take exception to their grammar, but it's pretty weak - they obviously DID think this one through, since they used a scalpel with cuts, not the chainsaw he could have used (and that was predicted so loudly by so many...)

    - Mayor Miller saying there was a surplus does not make it so. Accounting is simply making the numbers fit your lie, which is why so many accountants and lawyers play golf, and the rest of us prefer baseball & hockey, where there are actual rules & referees.
    I'll confess, I'm one that doesn't know, understand or even guess at what the truth is ("Was there a surplus? Wasn't there?")
    ...but I, like many, MANY others, have to wonder why Mayor Miller refused to hire an outside auditor when Ford asked him (very nicely, too) to do so...
    In any case, even WITH Mayor Miller's magical surplus (where DID that come from, anyways?), these cuts are clearly necessary, since even this blog acknowledges multi-million-dollar shortfalls over the next years to come.

    - It certainly COULD have been worse! If Ford had tried to make the budget work RIGHT NOW, THIS YEAR, the city would have been in FLAMES.
    It wouldn't have been a scalpel - it would have been a CHAINSAW.
    As it is, adding one minute per day to someone's commute is NOT going to hurt ANYONE, whether they work at PriceWaterHouseCooopers or at McDonald's - and that's the WORST cut, one minute per route. (I'm a Metropass holder and daily TTC user, before anyone slaps the 'polluting capitalist elitist' tags on me.) :)

  2. Sorry, I got cut off there. Appears I'm a little long-winded...anyways;

    - Lastly, saying "just because we have it, we should spend it", isn't right either.
    I ran a condo for a while (thankless task), and we had the same argument with the Board constantly; we had a $3m "surplus".
    The word is misleading; we had more money than we CURRENTLY needed, but we didn't know what might come up down the road...
    Wouldn't you know it, not twenty days after the Board voted to use the surplus to improve the parking garage and grounds, the roof cracked.
    End cost? Just under $3m - which then turned into more than $5m after the cost of BORROWING, which is what Mayor Miller did a LOT of.

    What could we POSSIBLY spend $300m on? A natural disaster. A man-made disaster. Heck, a snowfall deep enough to panic Mel Lastman might knock off a tenth of that alone... I would really like to keep that "surplus" money in the kitty for a rainy...windy...snowy...fiery...?!? day, and yes, I'll put up with one minute longer on each bus I take (four minutes per day) to do it.
    (I'm far from the only one.)

    I didn't vote for Ford, but I have to tell you, with pokeable logic like this, we are most certainly not going to get rid of him any time soon (unless he runs for Premier...)

    (I sincerely hope I didn't sound like TOO much of a pompous jerk there...sorry, so sorry, if I did...dialogue's important, even if we disagree.)

    Thanks for listening...(and for being kind...)

  3. I'm sorry Mark, But I just have to take exception to the assertion that cutting transit will add only one minute to a commute. While it may appear to be so on paper, that simply isn't the case. In many instances, the buses and routes that are cut are already vastly overcrowded at rush hour, and the wait to even get on a bus increases the further you get from the city. Some of the poorest neighborhoods in Toronto are already pretty poorly served, and it's only going to get worse, with people waiting anywhere from 15-45 minutes simply to get on a bus. Chances are they're going to start lining up earlier, which means cutting into time they could be spending with family, eating breakfast, or getting a proper amount of sleep.
    And the assumption that time works the same whether you work at McDonalds or PriceWaterhouse is also flawed. In knowledge based industries, it is expected you will be on time, but it's not overly harped on - if you are late, you work late, you get a meeting with the boss in the most egregious of circumstances, but it is by no means the same with retail. If you are late in minimum wage retail jobs, it affects you and everyone around you - these are jobs that depend on your presence at a required time, if you are late often enough, say three or four times, chances are you will be fired. You simply cannot afford to be late in many of these instances, and yet, at the same time, the city isn't giving you much choice. And what about coming back? If you're waiting 15-45 minutes (or more) just to get back to your home, that cuts into dinner, family time, etc. and simply makes everything more stressful. The TTC cuts are a big deal, and they should be regarded as such.

  4. And sorry about the bloated text. Hadn't realized I wrote that much.

  5. One important fact that has been missed in the discussion of job growth since amalgamation is that many of the City's services such as transit and police were ALREADY amalgamated under the old Metro government. In the TTC's case, the growth in staffing represents the effect of clawing its way back from the cuts of the mid 90s, followed by deliberately improving service to encourage more demand. There was also a change in the Labour Standards Act regarding how long operators could work and this added to the total count. Rob Ford just quotes total job numbers and blathers on about how we don't need six receptionists any more as if every single service existing as a separate entity before amalgamation, and is if there has been no legitimate reason for hiring more staff.

  6. @Mark. OK, you wrote a mouthful so I can't deal with each item but I'll deal with some.

    -The 'Miller did it' argument has been used a lot, including by councillors in committee meetings and on the Council floor to justify anything from a lack of consultation to scare tactics to closing libraries (those libraries were later kept open).

    -Toronto pays one of the lowest property tax rates in North America. To say that we are overtaxed ignores how fortunate we are. Hamilton, for instance, pays twice the rate we do (.78% to 1.46%) while operating in the same governance structure and receiving fewer services.

    -I think your argument about the fact's presence with Nunziata is very weak. Why wouldn't they discuss the 2012 budget when dealing with the 2011 budget? They certainly impact each other, particularly when you're spending the entire surplus on it. And then you go on to criticize my piece for suggesting to spend part of this year's surplus (not all of it!) on preserving services.

    -Miller's surplus came from the same place that Ford's did- from starting out with conservative department estimates and then beating them at year end, sometimes due to things like good weather (less snow clearing etc...). Read Matt Elliott's piece today for more on how a 'surplus' in the context of city hall is unique to other budgets.

    Lastly, what could we spend $300 million on from inflationary measures last year (freezes in real terms)? Well, we could invest in TTC service improvement and infrastructure that it sorely needs (and will be more expensive if we put it off), hire more firefighters in order to meet provincial and industry standards, improve roads and put some money in reserves.

    We need to invest in our city too, not just see how we can get by at the cheapest rate, and that's the direction this budget provides.

    Thanks for commenting Mark.

  7. @Steve

    As usual, that's a really insightful comment Steve. Thanks for adding it.