Wednesday, June 8, 2016

Toronto has no choice but to pony up and raise taxes

Toronto needs more money. We want trains, tunnels, social housing that’s not disgraceful and a shiny happy waterfront, and we can’t pay for them. Everyone on City Council knows this, so periodically they convene a sacred ritual: the Airing of Preferences. Tuesday’s City Council meeting was the latest, and it went largely according to script.

All agreed that provincial and federal governments should cut bigger cheques. But beyond that, it was polite war. We should raise money by hiking property taxes, which are very low by GTA standards — maybe by five per cent. No, the $258 per year that represents on a $750,000 home would turn senior citizens into the streets. Significant efficiencies still await discovery in the city budget. No, that’s an ideological fantasy.

In between these occasional ceremonies, council has kept on approving capital projects and letting problems fester, balancing each year’s budget by hook or by crook. And Tuesday was in many ways pro forma. But we are perhaps closer than ever to escaping this pit of shame.
Wallace on who should pay

At the May 24 meeting of Toronto’s executive committee, Coun. David Shiner asked city manager Peter Wallace if he thought Toronto taxpayers could reasonably shoulder the burden of multibillion-dollar transit and public housing projects, as opposed to the province. Wallace’s response was as follows:

It is not my argument that they should be municipal responsibilities. That isn’t my argument. It is my argument that the kid who was born when those responsibilities were downloaded (from the province) is now in university. We have argued constantly, (under) two different regimes to the province, that it should be fixed. It has not been fixed.

We can make the argument and council can make the argument: no, we don’t want to invest in transit because the government of Ontario and Canada should invest in transit; no we do not want to invest in social housing because the government of Ontario and Canada should make that investment. That has been (city council’s) argument to date. My submission to you is that is no longer a responsible argument given the absolute fiduciary responsibility that we have on the basis of the taxpayers and ratepayers of this city. And I feel that very strongly. It is not a question of what should be. It is a question of what is.

New city manager Peter Wallace’s report to council nicely laid out the state of play. Not only are property taxpayers not overburdened relative to those in neighbour municipalities; adjusted for inflation, their collective contribution to city coffers has fallen five per cent since 2010. And while efficiencies remain to be realized at City Hall — no one who interacts regularly with it can possibly claim otherwise — spending is well under control. In real dollars, per capita gross expenditures today are roughly four per cent lower than in 2010.

But the sponge has been wrung dry, Wallace argues. The city is spending 19 per cent less this year on social services than it did in 2010. There are no more savings to be had there, especially if the city is serious about fixing public housing. If the real estate market ever pauses for oxygen, land transfer tax revenues will cease providing their annual budgetary bonuses.

And if city council actually wants the multibillion-dollar things it keeps saying it wants, it simply needs to hike taxes or introduce new ones. “The practice of deferring necessary expense is most evident in the increased number of unfunded capital projects and priorities, now estimated at up to $29 billion over 15 years,” the staff report observes.

From an economic and logical perspective, many taxes and fees Toronto can currently implement or raise, or might be allowed to — on gas, parking, sales, vehicle registrations, billboards, whatever — have things going for them. From a political perspective, they all have drawbacks. And there are those who feel it’s unthinkable to consider any while the city “wastes” so much of its existing budget — for example, spending $1.5 billion extra for a Scarborough subway purely for political reasons.

Coun. Josh Matlow, one of just three councillors who on Tuesday voted against asking Wallace to report back in the fall on a revamped framework “for the city’s multi-year financial and budget process,” argued he can’t ask his constituents to pay more until council gets its “act together.” He quite rightly noted city council’s limited oversight of the police and community housing budgets.

But how do councillors expunge the rankest politics from something like the location of new public transit?

“By doing the right thing,” said Matlow. And he is absolutely right.

But human life is finite, and I am inclined to support any reasonable tax, fee, levy or temporary refund adjustment that can start closing the gap between what Toronto has and what it needs. That discussion should happen, finally, when Wallace reports back in autumn. And if Mayor John Tory’s transit agenda is to be realized, it will have to happen.

At executive committee last month, a somewhat aghast Coun. David Shiner wondered if Wallace was seriously suggesting Toronto taxpayers might shoulder the burden of capital costs for housing, transit and other big-ticket items. In Shiner’s view, these are clearly senior governments’ responsibilities.

“It is not my argument that they should be municipal responsibilities,” Wallace responded, rather splendidly. “It is my argument that the kid who was born when those responsibilities were downloaded (from the province) is now in university.”

“It is not a question of what should be,” he said. “It is a question of what is.”

Precisely. And this is under a left-leaning Liberal government that says it’s against austerity and committed to cities and social justice. It might not be there forever. The only real choice before this city, if it really wants the things it says it wants, is to pony up or shut up. I like ponies.
Please share this

No comments:

Post a Comment