Mayor John Tory’s fixation on low taxes is hurting us

Stig Harvor –

To his credit, our new mayor, John Tory, is energetic and eloquent, almost too profusely. Does he get enough sleep? He came to work at city hall so early the morning after his election victory that his office lights had not been turned on.

Tory was elected primarily as the best-positioned alternative to the discredited Fords. But he is a bone-bred conservative. His proposed 2015 city budget continues the Ford agenda of keeping tax increases below inflation.

The general but not unanimous opinion was Tory succeeded in this. But what all of us seriously need to accept is the consequence of only increasing taxes below or close to the rate of inflation, as Tory does.

In reality, the actual value of the slightly increased dollars available in a coming year is only equal to or less than the costs of services delivered the previous year.

No real new money is available for growing needs.

Yet with an increasing population and an aging physical infrastructure, the need today for more real dollars is acute.

Our experienced city manager, Joe Pennachetti, has vainly and repeatedly pointed out the need for tax increases above inflation. He now says a city sales tax will eventually become necessary. (What about a personal and corporate income tax as in New York City?)
Pennachetti says there is no gravy train. Over the last decade all administrative efficiencies have been wrung dry. Yet Tory is asking all city departments to prepare proposals for a 2% cut.

As pointed out by Councillor Gord Perks, a tax increase is actually a tax cut when the increase does not keep up with inflation. This is what effectively has happened since Conservative Premier Mike Harris forcibly imposed the amalgamation of our city in 1998.
Former mayors Lastman and Ford in their first year disastrously froze property taxes for political gain.

Additional small increases below inflation have now resulted in an overall 12.4% decrease in real dollars in Toronto property taxes, already the lowest in the Greater Toronto Area.

This means annual losses of about $300 million for a staggering cumulative loss of around $4 billion since amalgamation. Imagine how such losses could pay for many needed things in our city pinched for cash!

Tory proclaims political decisions should be based on real evidence, not political expediency. Very good. As an example, he is re-examining his campaign promise to privatize garbage collection east of Yonge St. (Yet he favours building the 3-stop Scarborough subway when its expensive $3 billion cost could provide a 30-stop LRT system covering more of Scarborough.)

What Tory needs is applying his principle of real evidence to develop his budgets. The first basic question to ask is: What are the needs of our city?

Determining needs is not complicated. The needs are many and well-known. An ever-growing, documented list of them is readily available. The complication is political. This is where Tory fails.

To suit motorists, he wants to spend an astounding $433 million to speed up repairs on the elevated Gardiner. This is on top of the $500 million already approved by city council over the next 10 years to keep the 50-year-old expressway from crumbling.

It is politically easier to tackle congested Toronto traffic conditions than facing the needs of its equally important social infrastructure: social and economic division, affordable housing, recreational facilities, etc.

In a welcome departure, however, from four destructive years of the Ford administration, Tory proposes to spend a bit more money on some badly needed social and other services. The problem is he does not have the $86 million extra money he needs.

This gap in Tory’s budget appears mainly caused by our cash-strapped Liberal provincial government last year cancelling its earlier agreements to annually providing money to offset the costs of Toronto social housing until 2018.

To fill the gap, Tory now proposes a very unusual move of extreme financial trickery not tried since amalgamation.

He wants our city to borrow from itself by juggling money between its operating and capital budgets.

This will require future rises in taxes to repay the loan and its interest. The only alternative is to cut needed services.

Tory is stuck. His fixation on keeping taxes low, even for people who can afford them, is quickly catching up with him.

March 4, 2015