politics
Is a Projected $115-Million Surplus Vindication for Mayor Rob Ford?
City staff are saying that Toronto will end the year with some extra money, but that's not necessarily the mayor's doing.
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When Rob Ford was running for mayor in 2010, a central tenet of his platform was that the City had all the revenue it needed. He insisted that overspending was the municipal government’s true problem, and that billions of wasted dollars were sloshing around at City Hall like gravy. His message hasn’t changed much, though the billions haven’t materialized.
Now, as his increasingly beleaguered administration enters its third budget season, a report on next week’s budget committee agenda says the City is projecting a $115-million year-end surplus. That’s a pretty good result.
Is this Ford’s doing? Was he right? Now’s a good time to check.
First, here are some surplus numbers from previous years. The budget projections are taken from City staff reports issued each fall.
2008:
- Projected in fall: $300,000
- Actual, at the end of the year: $88,577,000
2009:
- Projected in fall: $32,700,000
- Actual, at the end of the year: $359,597,000
2010:
- Projected in fall: $103,356,000
- Actual, at the end of the year: $367,466,000
2011:
- Projected in fall: $139,300,000
- Preliminary, estimated in May 2012: $292,741,000
(We’re still waiting on final numbers from 2011. The City should be releasing them soon.)
The first thing to note is that fall projections—which are usually done on the basis of the City’s financial performance during first six months of the year—are incredibly unreliable. (Whether they are inevitably or intentionally so is a matter of some debate.)
Another thing to note is that Toronto’s previous mayor, David Miller, was getting results—projections and actuals—that are comparable to Ford’s. Miller was mayor until Ford took over in December 2010.
But Ford isn’t just about the bottom line. He said he’d do a better job of handling the City finances than Miller, sure. But he also made another significant claim: that he’d do it all by cutting spending, rather than by raising revenue.
The mayor can claim some credit on the cost-control front. Staff are projecting about $14 million in year-end surplus as a result of savings from the new contracts Ford’s administration negotiated with the City’s unions earlier this year. Millions more in savings are attributed to unfilled vacancies. In other words, the City is saving money because it has fewer workers than it was planning on having at the beginning of the year.
Ford can also take credit (or blame) for cutting the City’s revenue. He has held down property taxes, and, unlike Miller, he hasn’t had income from the $60 Personal Vehicle Tax to help balance budgets. That’s because Ford eliminated that tax as one of his first acts as mayor.
But a big chunk of this year’s $115-million projected surplus is coming from revenue. The TTC has had more riders than it was expecting, resulting in about $5 million extra in fares so far this year. Building permits have taken in about $13.5 million more than expected. The biggest single chunk of revenue is coming from the Land Transfer Tax, which Ford has said he wants to start phasing out. Staff expect it to over-perform expectations by about $41.7 million. The billboard tax, which Rob Ford voted against as a councillor, is bringing in $7.75 million more than expected. All told, revenue accounts for well over half the projected surplus.
And this isn’t the only aspect of the budget in which Ford’s polices haven’t made much of a dent. As Matt Elliott points out, the City’s net operating spending has continued to rise under Ford.
The City under Ford is doing fine, fiscally. But at this point in time, it would be a stretch to say the mayor has revolutionized anything. For any other politician, this wouldn’t be a big deal.
We shouldn’t ask for miracles from our policymakers—unless, like Ford, they persist in promising them.
