ON JAN. 1, 1998, six former municipalities amalgamated to form the new City of Toronto. Mayor Mel Lastman said at the time that there would be “winners and losers”.
North York, Etobicoke and Scarborough were financially strong, while the challenged municipalities were York, East York and Toronto.
Some 11 years later the city has financial problems. Many services and bylaws are still not harmonized. Salaries and benefits of employees were ramped up to the highest rate of pay across the city, instead of an averaging over the six former municipalities. New services have been added that are not required.
We cannot be all things to all people.
The forecasted budget deficit for 2010 is $500 million..
The city cries poor and the spun message from city hall is that it’s the fault of amalgamation, downloading and other orders of government.
In fact, Toronto is receiving $600 million more for its budget from the provincial and federal governments but is spending $1 billion more in the same time frame.
The mayor and city council should begin the budget process by requesting staff to reduce the overall operating budget by five per cent. This would yield $450 million, and with the 2009 surplus (a $50 million average), it would eliminate the $500 million shortfall.
Residents should expect this from their elected representatives and be spared the angst and drama of threatened cuts to our most important services.
With the City of Toronto Act, city council has the power to impose an array of taxes. In the past year Mayor Miller initiated the vehicle registration tax and the land transfer tax. Council has the ability to levy a hotel tax and a liquor tax but has held off thus far.
Recent debate has centered around a billboard tax. Taxpayers already pay (on top of property taxes) for garbage pickup and water consumption. There is even talk of adding a City of Toronto tax to the HST.
Our city already has higher business taxes than the 905 and with each of these newly created taxes Toronto loses more business and residents to the 905. This has had a fundamental impact on the decrease in taxes collected to form our base budget.
Toronto needs to spend less, before it imposes new taxes, and attempt to live within its means. We need to look at ways to build the tax base not the tax burden.
In addition to reducing costs we need to focus on returns of city investments. The city can effect growth revenues from economic development and infrastructure initiatives (i.e., energy savings) The following budgets have increased by more than 100 per cent in the last 10 years: police, fire, TTC, solid waste and parks and recreation. Approximately 80 per cent of the $9 billion operating budget is directed at public sector wages and benefits.
The city needs to engage with our employees and encourage them to find better ways to operate the city and find savings.
There should be a budget envelope system with caps to departments, which encourages managers to find new savings and partnerships for service delivery.
City union leaders need to recognize that Toronto does not have sufficient revenues to meet all of its expenditures. We are all in this together.
Regular communication with our city unions could lead to fair negotiations of changes in the collective agreements.New service models could then be implemented.
It’s time to build bridges with the 905, the provincial and federal governments. Toronto needs a new approach. Excellent service for the dollars spent. This new attitude will improve the quality of life and guarantee a sustainable future.