Mayor Tory doesn’t seem to know what he’s doing

John Sewell –

You may not be aware of an obscure section of the City of Toronto Act, the law that governs the things city council can and cannot do. Section 228(5) states that city council cannot include in budget revenue the “proceeds from any borrowing.”
In short, city council must have a balanced budget. It is not permitted to have a deficit budget.

Maybe Mayor John Tory and the city’s senior staff are not aware of the law. Maybe they think the law doesn’t apply to them.
The mayor has proposed to council that it spend more in 2015 than it will take in, apparently for the purpose of keeping the property tax rate as low as possible.

The budget he has proposed has a deficit of $86 million. That’s not a large amount in a budget of almost $10 billion, but making a balanced budget would require a further increase in property taxes of 3.5% on top of the proposed 3.2% increase on residential properties. That would be an increase of 6.7%—not as much as Mississauga, but apparently too much for the mayor.
The mayor uses two justifications for his deficit budget. First, he promised the tax increase would be less than the rate of inflation.
A tax rate less than the rate of inflation means that not enough money is raised to pay for the same things as last year, which might make sense if the city were offering extravagant services, but we’ve been in cut-back mode since the megacity was enacted 18 years ago. That promise means even fewer services.

Inflation has been running at just over 2%, so even the 3.2% tax increase breaks that election promise.

His second justification is that he hoped the provincial government would give the city $86 million. But the province has its own financial pressures and says it won’t agree. Mayor Tory hoped to play a game of chicken with Premier Kathleen Wynne, but she refuses to play.

The proposed budget is not the full picture. It does not include any funds to cover the wage negotiations now underway with the Toronto Police Service as a new collective agreement is hammered out.

If we assume the police get a settlement of a modest 2% increase, that will add $20 million to budget costs.
If the police board had studied the police budget on a line-by-line basis rather than simply approving the general sum proposed by the chief ($957 million), the costs of the new agreement could probably have been found. But the police seem not to be subject to the same rules as other city agencies.

What is also discouraging is that the mayor touts “improved services” with $75 million of this deficit.
This includes free TTC for kids (but a fare increase for adults), the inflationary costs of a student nutrition program, providing an extra $50 000 apiece for eight recreation centres, making more shelter beds for the homeless, hiring one more building inspector, and so forth.

When push comes to shove, will he decide to drop these programs rather when a decision is made to obey the law?
Why does Mayor Tory and so many others who are elected to public office believe we should not pay our way? Why do they fudge the facts so much, try to blame other governments and generally fulminate about how they are such responsible leaders when it comes to money?

Whom do they expect will pay for our debts? Or when they propose cutting services so much (as Prime Minister Stephen Harper has done) how do they expect people to be well served?
Why is the mayor so willing to flout the law?
Mayor John Tory is just beginning his term, and it is not a promising start.
John Sewell is a former Mayor of Toronto.