There will be a lot of attention on the increase in tax rates in this budget. Should it be the 2.5 percent increase in the staff recommended budget, or the 1.75 percent proposed by the Mayor? However, that conversation, in isolation, will miss what matters most in the budget discussions, the public services that the budget plans for and pays for. The staff recommended tax-supported budget proposes an increase of expenditures of 1.5 percent. This increase will leave us with fewer services than we had last year. There are some Toronto city councillors who consider an increase in spending below inflation as a victory. This lopsided view is like a family celebrating lower grocery bills without noticing that their children are hungry.
An increase of 1.5 percent could be considered an improvement from the increase of less than one percent last year, but taking inflation and population growth into account, we would need an increase in spending of more than 3 percent just to stay in the same place as we were last year. A 1.5 percent increase means a real per-capita decrease in services.
The chart below shows a gap of $365 million between proposed gross operating spending in 2014 and what we would need to keep the level of services we had in 2011. The draft budget puts the city on track to be $176 million dollars short of even maintaining the services we have now. And we know that even existing services aren’t adequate – as lack of access to recreation programs, or the backlog of repairs at Toronto Housing shows us.
Spending Changes in City Programs
The overall budget is increasing by 1.5 per cent. However that masks changes in different program areas. Overall spending on City services – which includes a wide range of services from long-term care homes and services to transportation services – is decreasing by 1 percent, while spending on agencies is increasing by 4.1 percent. More than 90 percent of that increases in spending on agencies is on the TTC and Police Services. And the winner for the biggest increase both in absolute and percent increase in spending? The Police Services Board, with a whopping 6.5 percent increase.
We have to be cautious about false economies. What we lose in public services, we will need to make up for out of our own pockets. And, often, these services can be delivered much more effectively, and economically by the City.