Tuesday’s Headlines

24 comments

1. I didn’t vote for Adam Vaughn, but I like having him represent me at city hall.

   Who is this Mel Lastman guy? Why would they put an interview with a furniture salesman in the Star? I guess it is meant as a joke. Maybe they can make a series of it and interview Kevin Clark tomorrow.

2. I never thought I would quote Hume but:

   ” We’re the ones who vote for the Mel Lastmans and the David Millers because they promise they won’t raise taxes. Then when the spit finally hits the fan, we turn around and scream bloody murder.”

   If Miller needs to “sell” anything it should be that our Toronto taxes are artifically low because we have been raiding the reserves and selling Hydro poles for years. The last 15 years have been great. Check please.

3. Lastman is complaining about union contracts? Earth to Lastman. YOU NEGOTIATED THE LAST ONE.

   Someone needs to give Lastman a punch in the mouth.

4. I never thought I would be so happy to see an article in the Globe, but:

   I feel a little vindicated to hear of the rumblings that David Miller is putting together a group (at God know what expense, but we’ll get to that later) with the goal of selling the people of the city on his tax plan and his overall approach to the city’s finances.

   I’ve been arguing with friends since the taxes were deferred that the fault of this lay solely with the Mayor, who spent too much time thinking he had a political problem and never figured out (until now it would seem) that this has always been a PR problem.

   People HATE taxes…they always have and any time you want to levy another one, people are not going to like it…the importance of the taxes are completely irrelevant!! I know that’s tough to swallow, but no one wants to part with their money and NO ONE wants to part with their money involuntarily. That’s the PR problem…if the general public will never love a tax, how can you convince them?? That is likely the exact question that the Mayor was asking himself before the tax vote. The answer, so clearly presented now in retrospect, is that you have to sell the public on the sheer terror of the alternative.

   Sure, you’re going to be accused of fear-mongering. But if you wait until afterwards, as the Mayor did, you get accused of fear-mongering AND petulance. This budget plan has clearly existed for quite a while and the alternatives, should the taxes be defeated have probably existed for as long. (Does anyone really believe they just made all this up in the last couple of weeks?) Regardless of what the people on this site know (If you’re here, you probably have your ear to the ground, eh?) the general public did not know, and still doesn’t know, the plight we are facing.

   So, the Mayor f’d up and you can’t change that now. I’m glad he’s trying to get his camp together to go to the people and try to educate them about how bad things are now and could be very soon. I hope that this doesn’t cost and arm and a leg, because it would be really stupid for the Mayor to get caught with his hand in the cookie jar. Sure you have to spend money to make money, but when there isn’t any money sometimes you have to settle for photocopied flyers instead of bus shelter posters…I’m thinking of the “1 Cent Now” campaign.

   I know there isn’t an election for a while, but if we think that getting the public’s support is only important at election time then we don’t have as strong a democracy as we should.

5. Lastman is an idiot, this is the only comment I am leaving about him.

   Christopher Hume is absolutely right when he says we are all to blame for the stupid leadership we get. I find it hilarious when people complain about our political class. Well, guess what! Our leaders are nothing but a reflection of all of us. People think that by voting (in an uninformed way) they can shift they duties and responsibilities to politicians, no wonder things are all screwed up. “We continue to demand European-style public services on American-level taxes.” He sure nailed that one.

   The Kipling Hub: I will believe it when I see it. Of course 35 million dollars will not get you something like this:

   http://en.wikipedia.org/wiki/Berlin_Hauptbahnhof

   And so we keep falling behind…

6. Until there is a commitment from the City to ringfence new revenues to new projects, people won’t trust them not to simply allow wage inflation swallow additional taxation. The Mayor refused to do that, even in part.

   That’s why when Ireland introduced the Plastic Bag Tax on environmental grounds, it pledged that revenues would be directed to environmental projects to avoid the “tax grab” tag. A plastic bag in Ireland used to cost 22cents Canadian and will soon rise to over 30cents.

7. NDP come out and pledge to end downloading – claim $396m saving to Toronto, phased in from 50pc in 2008 to 100pc by 2011.
   http://www.thestar.com/article/246145

   To me, this vindicates the decision to delay the taxes – it is now squarely an election issue.

8. I loved that Christopher Hume article. Someone in the media finally had the balls to say it. As long as people vote Denzel-Minnon Wong, Rob Ford(Like seriously, who is actually dumb enough to vote for this guy?), we will never achieve anything. I do not mind paying higher taxes for good services. It’s life. Get used to it.

9. Although humans seem to be hard wired to oppose anyone earning an honest living off of tax dollars, the fact is that wages do inflate. Paying those wages isn’t an incorrect use of money, especially when the current fiscal arrangement is entirely unsustainable.

   Also consider that Miller can’t promise anything other than that he’ll try to do something (this is particularly true given the deferral vote.) It’s up to Council to vote on any amendments to the plan staff recommend. However, before the deferral happened, there were motions placed that would ensure that people can clearly see how the new taxes are being spent. I believe those motions were placed by Shelley Carroll and she rarely places motions that she doesn’t know with reasonable certainty will be adopted.

   As well, as an overarching principle, allocating money based on revenue generated by certain types of taxes isn’t sound public policy. Priorities change over time. In 20 years we’ll be facing challenges that may not be on anyone’s radar today so should we just continue to invest in priorities that are two decades old because that’s what we allocated tax dollars to in 2007 or should we have the flexibility to use the money as it’s needed? I think it would be foolish to do the former. Clearly we need spending priorities and strategic investment over a period of time to correct things like our public transit infrastructure deficit but that’s what we elect politicians to do.

   On the NDP announcement: This doesn’t vindicate the deferral. The City won’t be financially sustainable if $400 million comes off the property tax base tomorrow, let alone four years from now.

   If the taxes had been adopted in July, voters would feel like they have more of a stake in the provincial parties giving Toronto what it needs so we would still get this promise and more. Plus, as these promises start coming down the pipe it’s sure to make Torontonians believe that Council should just find a way to exist until 2011 without the new taxes, which would be an unmitigated disaster.

   Although this promise may force the other parties to make a more concrete commitment to Toronto, for the NDP promise to mean anything, they’ll need to frame it as one of their conditions for supporting a minority government.

10. Adam – wage inflation for city services should be dealt with by property tax increases, not by step changes in financing. Just because the city has more money must not be a bargaining chip with CUPE, ATU etc. Big deal that we’ll “find out where the money went” – we need to know where it’s going BEFORE it’s spent.

    So uploading won’t fix Toronto, well, yeah I agree it won’t. But $400m is a hell of a start though – would you at least admit that?

    It doesn’t matter that the NDP haven’t a snowball’s chance in hell of being a sole government party. If the taxes had passed as scheduled, the NDP and their Northern Ontario leader would not have had the same political capital to gain from backing Toronto. Now with both Hampton and Tory proposing the reduction of the impact of downloading, McGuinty will be under pressure from Wynne and other Liberals in competitive seats to make some commitment to paying Ontario’s bills.

    If the Liberals matched the NDP’s commitment $200m in 2008 (the first phased in amount) would allow the Mayor to consider ratcheting back the LTT rate to 50% or 75% of the planned amount which would at least lessen the impact of this appalling tax and work towards gaining shares of PST or income tax to share the impact of new financing more equally among Torontonians.

    It also needs to be impressed on those outside 416 that uploading will help them too.

    One last thing – New York City just got $400m from the Bush Administration to help fund a congestion charge system. It’s not a done deal (they also have their “province” to deal with) but it was not anticipated. I’m not sure which part of that announcement I’m most surprised by – who’s paying, who’s receiving and what it’s paying for – but Miller should be on the next train to Ottawa looking for the same – miracles can happen when by-elections are imminent!

11. Mark – In Toronto’s case, would we argue that today the price of implementing a Congestion Tax would outweigh the possible benefits? Is that the advantage of the LTT and Vehicle Surcharge, that they aren’t associated with much new infrastructure?

    It’s too bad there weren’t other taxes that could be easily implemented (parking tax, for example)…this LTT is a tough sell, especially in the Northern parts of the city.

    On an somewhat related matter…I’ve been an NDP for a long time and I can’t help but feel like they are going to be obliterated in the next election. I hope I’m wrong…it’s just my gut talking.

12. Mark, as much as it would be nice to see hundreds of millions of dollars worth of wonderful new services, we need this money to repair almost two decades of neglect. Once Toronto begins to recover from that it’s reasonable to expect myriad new services.

    …I think $400 million would be a great start and I’m glad that Hampton started the bidding for our votes higher than $200 million. Now we’ll have to see what McGuinty announces at the Association of Municipalities of Ontario conference on Monday.

    Unfortunately, even if the tax plan in front of Council had been approved in July, the City would still require about $200 million more to balance its 2008 budget. The taxs cover about $360 million and the current gap between costs and revenues is $575 million. So partial uploading would only get us through 2008.

13. Adam – the water bill is going up 9-10% in the next couple of years for precisely that reason – the infrastructure gap. But people can understand that because they realise what they are paying for. The garbage charges, botched as they are, are a similar attempt and will likely be accepted. Moscoe has mooted new ways of financing the redevelopment of TCHC properties.

    There are ways of financing infrastructure renewal but general taxation is always going to be suspect in that regard, especially if the city cuts development charge deals, the proceeds of which should have been paying for the infrastructure.

    Josh – the congestion tax targets the areas most under pressure and where there is most current transit provision – downtown. It doesn’t target areas where transit is currently inadequate. The vehicle tax hits the people who keep a car in their drive for the weekend, never mind those who can’t get from Scarborough to their job in York efficiently.

    I would argue that squeezing parking would help too but there has to be linkage with new transit provision as there was in London. If Toronto had to go it alone I would be wary of congestion tax but if the Feds threw in some dough it would might just work.

14. What I do not understand is why we couldn’t find new taxes that actually did something productive. These taxes are no better than a greater than 3% property tax increase.

    I would think that a vehicle registration tax that gave the car the right to drive on smog days would be better accepted by the public. Most people would pay the tax either way (and a portion of those who didn’t could be hit with big fines if they drove on smog days –> further revenue!).

    Even a parking tax would have had a positive end result. As it stands, even as a NDPer with a strong interest in increasing the services (and thus the tax base) of the city, I find it very difficult to argue for these new taxes.

15. It can’t be a coincidence that the Star’s report on Mel and the budget justaposed his quote, “Politicians have got to learn … to say: `We can’t afford it,'” with his tirade on how the world is ending because the gold-plated windrow-clearing service in North York is being cut (it’s a “necessary service”, after all!).

16. Mark (not Dowling), it’s an unfortunately simple explanation. The City is in a financial crisis and needs revenue. The two taxes that are proposed are the easiest to collect (don’t require additional infrastructure) and, in the case of the LTT, is relative to a person’s wealth. If you read the staff reports on the taxes you can see the explanation for yourself but a parking tax was considered along with several other options and deemed unworkable for the short-term. In the medium-term, it’s likely that you’ll see a billboard tax and parking tax (in that order).

    The LTT and vehicle registration fee aren’t the most innovative revenue tools or particularly useful from a policy perspective but they can keep the City solvent while it continues to press its case with the provincial and federal governments.

    That said, I think it would be a mistake to say that the LTT is no better than a blanket property tax increase. The LTT is much fairer than the property tax system because it taxes you when you’ve got the money. If the City were to use property taxes to raise the necessary revenue, you would experience a 15-20% increase in a single year. For a person on a fixed income (especially pensioners and people who receive disability support payments), such a dramatic increase could force them from their homes.

17. Adam: I wouldn’t say the LTT is *much* fairer, but I do understand this point. However, I often do wonder how far the ‘fixed income’ argument can go as surrounding municipalities have significantly higher property taxes (and given the fact that renters – perhaps the most disadvantaged group – pay a significantly higher property tax than homeowners – almost 3 times). You would think that some sort of tax refund for pensioners and those who receive disability support payments would rectify this problem.

    I also question whether there were no alternative options available as revenue tools in the short term. The options presented are pretty mundane -without much creative thought.

    Now if only Miller had actually predicted this crisis in advance and put in place the systems necessary for some of the more innovative tax ideas.

18. Miller saw this one coming more than a decade ago. The problem wasn’t not knowing the crisis was coming; the problem was getting the people with the power to avert the crisis to act (ie, successive provincial governments.)

    Having City staff evaluate the options for revenue tools was pretty much the first thing Miller did this term because the City of Toronto Act, which granted the new taxing powers, wasn’t enacted until January 1, 2007.

19. Adam – it’s not enough to trot out “we need money” every time you post. Responsible civic leaders ensure the public understand the need for cash, get trust from them that it will be spent wisely and raise it in a fair fashion.

    It’s not acceptable to fail on all three grounds, but given the record of the last four years with $1 billion reserve drawdown, the looting of Toronto Hydro, the 9% pay increase for councillors, the so-called “fiscal consultations” which the Mayor was too busy to attend and now a class war tax on moving from renting to owning or from a bachelor to a family home I feel that the record is not stellar.

20. Mark Dowling, it may not seem to be “enough” to you to say that we need money but that’s the reality. Simply maintaining the level of service we had before the cuts last week requires these taxes and more.

    That said, I believe that the mayor’s communication strategy has been an absolute failure. In fact, he even seems to have come to terms with that, saying at last week’s announcement of the cuts: “Maybe there are other things we could have done to communicate the issue.”

    You’ve listed using reserves and Hydro assets to pay for operating expenditures as failures. But in other posts you’ve said that you think pressuring the provincial parties in this election is the right strategy to use. With that in mind, how would you have found hundreds of millions of dollars to get us to this year without raiding reserves or calling in Hydro’s debt? It sounds like you want to have your cake and eat it too.

    I have to say I’m actually a bit split about having the mayor at the consultations. In theory, yes, he should be there to deliver the message. In practice, if he shows up then the conversation is no longer about taxes. It’s about the mayor personally and everyone’s little pet project that they’ve always wanted to talk to the mayor about. But there was surely a better way to approach it than telling people that he’s got scheduling conflicts.

    I also don’t believe that, at the time, the pay increase was out of line. However, as a PR tool, Council ought to have called an emergency meeting to roll back the pay increase, cut their office budgets by 10% and axe perks that cost the City anything. At least after doing that we could start talking about the real issues.

    Your “class war tax” is a ridiculous characterization of the LTT. Any family that hasn’t owned a home before is going to be exempt from the LTT for what’s essentially the first $400,000 of their purchase. If anything, property tax is a “class war tax” because of how it treats renters and seniors. If nothing else, the LTT will at least diversify the sources of revenue so tenants and seniors aren’t being unfairly burdened more than they are now.

    So, Mark, if you’re going to call me out for supporting a particular strategy, will you at least put forward your alternative?

21. Adam – I was being sarcastic about Miller ‘knowing’ about this problem. Miller (and everyone else who follows city politics) has known about this for years.

    The City of Toronto act was passed on third reading on June 12, 2006. Frankly, Miller knew the ‘gist’ of the act when it went for first reading in 2005. If he had any interest in implementing good new taxes as opposed to just any old tax to increase revenue, he could have *evaluated* potential options then – more than a year and a half ago. Yes, some of them might not have been possible under the final act (finalized now more than a year ago), but it would have been a great starting point. Then, when the law was passed more than a year ago, they could have started implementing these options.

    This is more than simply a bungled communication strategy. This is a mayor who never opened his mind to the idea that he wasn’t going to get a huge bail-out from other levels of government.

    Now Torontonians are stuck between horrible taxes that make little sense and horrible service cuts that make even less sense.

22. Mark, which taxes do you think the City should have had ready to implement within a year?

    Assuming that it would have been possible to start doing the leg work on some other tax options a year in advance (and I’m not sure that’s a fair assumption), creating an entirely new administrative and physical infrastructure for collecting and administering taxes couldn’t be complete by now (and it would add significant operating costs, too, with the additional staff and/or consulting costs required.)

    You’re looking at a couple of years to implement a parking space tax that would bring in less than $20 million per year at $250 per space per year (the highest price point identified by consultants). And a congestion charge system at $15 per car (also the highest price point) would bring about $235 million but take at least five years to implement (assuming we have the money to build the physical infrastructure required.)

    The billboard tax, which is the next lowest hanging fruit on the tax tree (after LTT and vehicle registration fees), will require some significant revisions to the signs by-law before it can be implemented. I suppose that with some foresight, the billboard tax could have been ready to go along with the LTT and vehicle registration fee (it would take less new infrastructure because there is already an application process to have a sign/billboard approved, this would just add a mandatory fee and more teeth to the by-law.) However, the billboard tax is only expected to generate $3 million.

23. Adam – here’s my alternative for the top-line revenue: a share of PST and/or a share of Ontario income tax. Neither of which we have because of the inadequate negotiation skills of those who bought the bill of goods also known as the City of Toronto Act which didn’t even let us have samosas until George Smitherman graciously signed regulations and shut John Filion out of the credit. Instead we got nickels and dimes – and the dimes we didn’t even have signed agreement from Ontario to levy at the time of the vote.

24. My more militant side agrees with you, Mark. We should have demanded the crown jewels and not given in until the province relented. However, the problem I’m having is that Toronto isn’t in a strong bargaining position now and won’t be at any point in time in the near future since it has very little leverage.

    So at some point Plan A has to give in to Plan B. And although you may argue that Plan A was abandoned too quickly, I’m not sure that’s a fair assessment. Waiting to see if Plan A materializes would have forced some combination of a 40% property tax increase and/or more than half a billion dollars in service cuts just to get through 2008.