Do you hear some odd terms during council's budget debates? Here's what they really mean.
No one wants to hear there’s going to be service cuts. No one wants to hear there will be higher taxes, either. Unfortunately, you’ve got to have one or the other. So City councillors and staff have developed many ways of talking around the subject. Let’s demystify some common phrases with hidden meanings.
Two per cent cut
Actual meaning: More like four per cent.
When the Mayor requested that each division cut their budget by two per cent, he wasn’t factoring in inflation. Every year, a dollar buys you a little less. This means that a City division has to spend just a little more (this year, about 1.3 per cent, but inflation tends to be around two per cent) to do the same stuff. Keeping their budget the same as last year’s is effectively a cut equal to the rate of inflation. So that means a “two per cent cut” is really more like four per cent.
Adding to the confusion is the fact that there’s no one rate of inflation. There are many different factors that affect prices: the price of food, for example, rises at a different rate than the price of hydro. However, when councillors and staff talk about “inflationary increases” they rarely get so fine-grained.
Actual meaning: Taxes and fees. (See “taxes and fees”.) Some councillors think “revenue tools” is a pernicious attempt to weasel taxpayers into giving up their hard-earned money. Others believe that residents would be more amenable to taxes if they didn’t have a knee-jerk response to the word. This is a topic we’ll address more fully in a future article. Stay tuned!
Taxes and fees
Actual meaning: Paying for stuff.
A major city like Toronto can only last so long on low property taxes and promises of getting free things through the magic of tax increment financing before it has to acknowledge the basic truth that things cost money. Many city hall watchers wonder what it will take before we reach this epiphany. This year, Matt Elliott, Ed Keenan, Daren Foster, Sheila Block and more are all beating the drum for the principle that if we want things, we need to #payforstuff.
Good work, folks.
It’s been referred to the budget process
Actual meaning: “We don’t have room in the budget for this, so if you want this to happen you’ll have to give us more money.”
A good many things that City Council has promised, like the Poverty Reduction Strategy, earlier TTC service on Sundays, etc., have been referred to the budget process. That’s City staff’s way of saying that Council asked for more than they could deliver within the funding available.
Actual meaning: Deficit. In the red. Over budget. Wow! All of these sound way worse than “unfavourable variance”. Variance means how much your actual spending varies from the budget. A surplus is a favourable variance, and a deficit is an unfavourable variance. Can this buzzword save nervous City staff from the piercing gaze of a small convocation of eagle-eyed councillors? Probably not, but it’s their best shot.
Focus on quality performance
Actual meaning: We can’t afford to hire more people, so everyone will just have to put in more overtime. This is my personal favourite of the bunch; it’s so elegant.
Work smarter, not harder
Actual meaning: We need to work harder.
Along the lines of the previous entry, this phrase implies that City operations can be streamlined to raise efficiency, requiring less staff and fewer hours. This is probably the case some of the time. However, the City has been “finding efficiencies” for the past six years. A good many divisions are just plain understaffed and overworked. As former City Manager Joe Pennachetti has been saying for years, there are only so many “efficiencies” you can wring out of a budget. (He ought to know.)
New and enhanced service levels
Actual meaning: This one is an actual City of Toronto term that you’ll find in every division’s budget. Every division has standards for the specific services it provides: how long libraries are open, how many potholes get repaired in a given time frame, how many transit users served. When a new service standard is introduced or an existing one changes, it gets noted in the budget.
Here’s where it gets slippery: just because City Council votes for something doesn’t mean it actually gets done. Maybe it’s because City Council didn’t vote to fund the things they approved. (See “referred to the budget process.”) Maybe it’s for political reasons: for example, a new bike lane downtown is going to be more controversial than a recreational bike trail in a park. Sometimes it’s a combination of both.
This handy term blurs the distinction between the stuff that councillors and staff promised, and the stuff that councillors and staff can actually deliver. Everyone comes out looking good. At least, until next year.