Time To Bite The Bullet

Business as usual' is not good enough

By SUN MEDIA

Beyond a spending and revenue problem, the City of Toronto has a budgetary problem.

Because of structural deficits, each year the city's operating budget starts deeper in the red.

For 2010, the hole is about $500 million, meaning that much has to be found in higher revenues, service cuts and/or funding from other levels of government, just to tread water.

Since every 1% increase in property taxes yields $20 million in revenue, covering the shortfall through a property tax hike alone next year would mean raising them by 25%. That's one reason for the massive TTC fare increase we face.

Meanwhile, as the Toronto Board of Trade points out, the city's capital budget shortfall for things like roads, sewers, water mains and buildings stands at $1.59 billion this year, expected to rise to $1.76 billion by 2013.

That explains why our arenas are near the end of their usable life and replacements are not on the horizon.

The biggest single driver of operating costs is staff, whose salaries and benefits account for about 50% of the operating budget and to whom the city has unfunded pension and benefit liabilities of about $2.8 billion.

Meanwhile, the overall city budget this year is $8.7 billion, a 58% increase from $5.5 billion in 1998.

All of this goes to show why "business as usual" is no longer viable at City Hall and certainly not for four more years following next year's municipal election.

The problem with "business as usual" is it leaves City Hall in a perpetual state of upheaval, stumbling from crisis to crisis, constantly begging for emergency bailouts from the other levels of government just to get through one budget a year, whereupon the entire process starts again for the next.

You couldn't run a business this way, and you certainly can't run a city this way.

While Toronto politicians are big on grand visions for the future, what they're weak on is practical, multi-year budgets and planning to get us there.

If you plan for more than one year, when a provincial surplus lands in your lap, you may not spend it all at once.

But Toronto doesn't play that way.

Money in is money out. A $238-million surplus payment? Spent all at once. Millions for hydro poles and parking lots? Gone. Rainy day accounts? It's pouring.

Now, as the province plunges from surplus into a record-setting sea of red ink, those one-time fixes are history and there's a big crater to plug for 2010.

We won't ask for foresight from this gang at City Hall. What you see is what you get.

We will ask anyone looking to step up and challenge for a job as councillor or mayor to come armed with a strategy.

Living and lurching doesn't work. Toronto needs a game plan to help return this city from crisis to greatness.