Parsing the Mayoral Platforms: Finance and Budget
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Parsing the Mayoral Platforms: Finance and Budget

Not sure who to vote for? Unclear on the candidates’ positions? In this series we’ll be examining the major mayoral contenders’ policies on the most important issues facing Toronto in 2010.

Illustration by Sasha Plotnikova/Torontoist.

Think of the budget as an oral exam. “Gentlemen: City staff predict a shortfall of $503 million in 2011, which will have to be made up through some combination of revenue increases and cost savings. Further funding will have to be found for any new programs or services to which you have committed, and budget deficits are not permitted. Try to sound like you know what you’re talking about.”
Cue Jeopardy music.

Rob Ford
Torontoist offered up a detailed rant on Rob Ford’s financial plan after he released it on YouTube back at the end of September, but we’ll recap the highlights for you.
The number of city councillors will be reduced from forty-four to twenty-two, an event which could only take place following the next election in 2014 and would also require half the councillors to vote themselves out of jobs. The overall savings of around $9 million would be trivial anyway in the context of a $9.2 billion budget.
The rest of the municipal workforce will be reduced through attrition, replacing only half of those who retire or quit each year. Ford says this could save over $66 million in his first year in office. In 2011 he also anticipates $67 million in savings coming from improvements in city contracting, with $100 million recouped in each of the following three years. However, the most impressive numbers in Ford’s October 8 “Fully-Costed Financial Impact Statement” (the phrase, and others that follow, are invented slices of business-ish buzzwording, presumably intended to impress the hoi polloi) come under “reduce cost of government,” predicted to save $230 million in 2011 through unspecified gains in efficiency.
During this time, Ford will hold the line on property taxes and repeal the infamous land transfer and vehicle registration taxes. Overall, he’s promising to crush the deficit and deliver a spectacular surplus of $1.7 billion in his first year in office.
The problem with Ford’s proposal isn’t the concept; after all, the city budget skyrocketed 44% during the Miller years with little to show for it (though to be fair, part of the reason could be the increase in the level of provincially mandated services the City had to provide), and it’s hard to imagine that there aren’t some savings to be found. However, there are a lot of assumptions that seem arbitrary: “How much d’you reckon we can save on contracts? Well, I’ve got ten fingers, so let’s call it 10%….” For all his self-congratulation about his business savvy, Rob Ford’s numbers look a little to good to be true.
Joe Pantalone
The Small Wonder is walking a fine line when it comes to finance, because with other candidates fanning the flames of voter waste rage, he needs to at least pay lip service to the idea that the city can operate more frugally. However, he also can’t be seen to be cutting off the “progressive” programs that were the only thing that made David Miller’s spending seem palatable to a lot of folks.
His recently released financial plan doesn’t rip out the beating heart of City Hall and hold it up for the mob to cheer in the way that Ford’s does, but like his rivals he tosses around the word “efficiencies” pretty freely as the key to the budget-balancing conundrum.
In a nutshell, we start with the current estimate that the city will need to dig up $503 million to balance the 2011 operating budget. Throw in Pantalone’s token progressive promises around a property tax freeze for impoverished seniors and some service upgrades, and we need a cool $541 million to keep the Sun happy.
Pantalone will fill the hole with $55 million from a 2.5% residential property tax hike, and a smaller commercial increase of 0.833%. He’s also counting on $35 million from higher property assessments, $76 million from the 2009 budget surplus, $180 million surplus from the 2010 budget, $75 million from selling city lands, and $85 million from magic beans “efficiencies,” again unspecified but presumably kinder and gentler than Mr. Ford’s. Voila, budget balanced and we get to keep all our nice, shiny programs.
Could he do it? After all, compared to Ford, he’s not exactly shooting for the stars. But still, those stars would have to align, this year’s budget surplus come in as predicted (by no means a sure thing), the economy not crap out next year, etc. Plus, to gain real efficiencies he’d have to start playing hardball with unionized city workers, who may be the only people that vote for him. In any case we’ll never know, because unless Ford and Smitherman quit the race between now and Monday, Joe isn’t going to be mayor this time around.
George Smitherman
As befits the designated centrist among our last candidates standing Smitherman’s budget plan promises more than socialist Joe’s break-even, but isn’t as surplus laden as what we’re told to expect from the Ford gravy train derailment scheme.
Smitherman starts with the same expected gap of $503 million, and then inflates it with another $238 million in tax decreases and new services. What madness is this, you say?
Don’t worry, he’s got a plan. The hole gets filled like this: $100 million from selling Enwave, another $65 million from selling city lands (why didn’t someone come up with this earlier?*), $33 million from higher property assessments, $76 million from the 2009 budget, $150 million surplus in 2010 (vs. Pantalone’s $180 million). On the saving side, Smitherman only replaces two-thirds of departing city workers (vs. Ford’s half) to gain $61 million, and he can’t help but dip into the efficiencies trough (thinly disguised as “better, smarter service delivery”) to pull out a cool $154 million.
Most optimistically, Smitherman figures he can charm, bully, bribe, or blackmail the province into providing another $100 million for transit, something David Miller wasn’t able to finesse despite numerous attempts. On the other hand, George knows a lot of folks at Queen’s Park, so maybe he can pull it off.
Bottom line, Smitherman says he’ll balance the budget with $50 million in contingency, and $100 million for a “Transit Trust Fund.”
Like his competition, Smitherman makes some pretty big assumptions that can’t be proven at this point, although he provides himself a little wiggle room with his contingency fund. Overall, though, his plan is probably the most measured of the three in terms of balancing cost-cutting, revenue, and new spending.
* Quite possibly—and this applies to both Smitherman and Pantalone—because selling assets to pay for operating costs is one of those big no-nos that the wise and prudent are supposed to avoid.
The Upshot
First, it’s evident that each of the candidates is going to to need a Goldilocks scenario to deliver all they promise, but there are big differences.
Ford’s plan is bold, ambitious, and unachievable. Even if his cuts achieve the savings he claims, it’s impossible to see how it could be done without taking the wrecking ball to service levels, especially if he’s going head-to-head with the unions. Joe Pantalone’s plan is unassuming and possibly viable, but lacks vision and doesn’t do enough to cut the waste (let’s call it a gravy eighteen-wheeler) that really does exist at City Hall. George Smitherman is the Mama Bear in this group, coming in the middle with a more balanced approach to saving and spending that could actually work.
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