The debate and decisions of Toronto City Council’s Budget Committee meeting on Thursday should leave Torontonians flabbergasted. On the same day that city staff tallied up the costs of the ice storm at $106 million, members of the Budget Committee were debating how to shave a few tenths of a percentage point off the property tax increase. The ice storm brought our reliance on city services into sharp focus. Extreme weather events and their costs and impact on city infrastructure and services are no surprise. In 2008, council began to plan for these events. It very sensibly changed the Municipal Code to establish reserve funds to address the unpredictable impact of weather on the city budget. However, the costs we are facing clearly exceed the $30 million in these reserves – Toronto has had to deal with the ice storm and major flooding in the last six months alone. In yesterday’s report, city staff suggested they come back to council with options on how to pay the city’s portion of storm-related costs.
The Budget Committee debate brought to mind an Op Ed piece in the Toronto Star from several years ago, where Hugh Mackenzie called for an adult conversation about taxes and services from our politicians. Mackenzie argued for an acknowledgement that you cannot provide quality public services without paying for them. While that call was directed at federal and provincial politicians, it seems that the budget committee is in need of that lesson. I would add two more lessons to that course:
- You need to learn to clean up after yourself. The city will be approaching the province to provide funding for the costs of the clean up from the ice storm. It is far from certain that the province will provide all the funding that is needed. And, given the challenges facing the province’s fiscal situation, they could and should expect the city to contribute to those costs rather than debate how to collect less revenue in 2014.
- It really does pay to play co-operatively. For all of the Budget Committee’s hours of anti-tax bluster, it is estimated the result would average a $13 reduction in property taxes per household. That might buy you a meal at a fast food restaurant during the next power outage. The Budget Committee seems to have forgotten that the role of governments is to pool our money together to buy things that we collectively need but cannot afford to buy on our own, and that can be provided much more efficiently when purchased together— like our electricity supply or our tree canopy. Governments are like a bulk buying club for things that we need that are complex, expensive, and have benefits that we can all enjoy. Politicians’ role to use the public trust they are invested with to make wise decisions about that spending, not to engage in an empty competition about who can come up with the lowest number.
We need a very different budget discussion this election year than the one we witnessed yesterday, one that starts with an assessment of our big, complex city’s need for services. That discussion could, and should, include whether our needs have changed and whether there are services we no longer need, and how to deliver services in the most effective and efficient way. It has to include a realistic plan for our well-documented needs for capital investments in extreme weather protection, transit, housing and social capital. And, a plan that we will stick to on how to pace and pay for these services.
Another essential starting point is that our services, and therefore our revenues, need to keep up with inflation and population growth. Just to maintain real, per capita services at 2013 levels would require an increase in spending of $176 million this year. Property taxes do not automatically keep up with inflation and population growth like income or sales taxes do. This requires that our city councillors discuss tax increases each year in a way that politicians at other levels of government don’t have to. We need the information, mechanisms and policies in place to support our councillors to have those difficult, adult conversations with each other and with all Torontonians.