{"id":56327,"date":"2016-11-24T16:30:17","date_gmt":"2016-11-24T21:30:17","guid":{"rendered":"http:\/\/spacing.ca\/toronto\/?p=56327"},"modified":"2016-11-24T17:48:09","modified_gmt":"2016-11-24T22:48:09","slug":"lorinc-john-torys-road-toll-epiphany","status":"publish","type":"post","link":"https:\/\/spacing.ca\/toronto\/2016\/11\/24\/lorinc-john-torys-road-toll-epiphany\/","title":{"rendered":"LORINC: John Tory’s road toll epiphany"},"content":{"rendered":"

\"feature-lorinc\"<\/p>\n

There\u2019s no question that Mayor John Tory deserves credit for hitching his political wagon to road tolls \u2014 on the Gardiner and the Don Valley Parkway \u2014 at a time when populist fires are raging all over.<\/p>\n

The case for such user fees is amply documented, and there are precedents everywhere, not least on the freeways of our tax averse neighbours to the south. Tolls are good for the environment and they can serve to underwrite other social goods, like transit lines designed to ameliorate congestion.<\/p>\n

You know the arguments.<\/p>\n

Tory, moreover, wasn\u2019t shy about laying out his own political calculations: lots of 905 drivers use these City of Toronto-owned highways and don\u2019t pay a penny for their upkeep or reconstruction. Economists hate externalities, but externalities are most useful if the people hurt by such decisions won\u2019t be voting for you no matter how they feel about road pricing. Commuters can shout all they want at talk radio, but they can\u2019t vent at the ballot box.<\/p>\n

Indeed, the thinking behind Tory\u2019s (latest) conversion on the toll road to Damascus brings to mind the reasoning behind David Miller\u2019s advocacy of the land transfer tax, the last great cash cow approved by Toronto city council. In any given year, the constituency most affected is tiny, and unlikely to sway an election.<\/p>\n

But the mayor \u2014 in coming forward with a plan that\u2019s bundled with various other revenue proposals\u00a0\u2014 has cagily elided measures that impact both of the City\u2019s budgets, and in so doing has succeeded in ducking, yet again, the steadily accumulating pressure on the City\u2019s operating outlays.<\/p>\n

He kicked that can down the road.<\/p>\n

The revenues from the tolls \u2014 Tory talked about $200 million, but the final tally will vary depending on operating costs and the tolling method \u2014 will flow into a dedicated infrastructure capital <\/em>fund, and then get allocated to the City\u2019s gigantic capital backlog ($33 billion over 20 years, including all sorts of unfunded projects).<\/p>\n

Now, consider that the lion\u2019s share of budget news you\u2019ve been hearing from City Hall in recent weeks \u2014 across-the-board operating budget cuts, outsourcing waste collection east of Yonge Street, TTC fare hikes, etc. \u2014 has focused on the operating side<\/em>. That budget gets more and more pressurized by the year, and will become a fire-breathing dragon once the new transit lines (Eglinton Crosstown, Scarborough subway, Smart Track) come on stream in the 2020s with not so much as a plug nickel of operating subsidy from the province. Your fares will skyrocket.<\/p>\n

All the mayor proposed to directly ease the pressure on the operating budget was a $22 million annual subsidy to commercial property owners and a mandatory hotel tax \u2014 raising $20 million \u2014 that has yet to be green-lighted by Queen\u2019s Park. In an $11 billion operating budget, such moves are little more than small cheese and have the effect of continuing to force council and City officials to squeeze spending, outsource services, cut programs, and hike user fees.<\/p>\n

The capital budget\u2019s impact on the operating budget, meanwhile, is simple: every year, Toronto residents hand over more than $450 million in interest payments<\/a> to service the City\u2019s accumulated debt.<\/p>\n

So while the new toll revenue \u2014 which is expected to start flowing in 2019 if none of Tory\u2019s bold thinking goes sideways \u2014 will help mitigate the City\u2019s annual borrowing costs (and thus that huge interest line item on the operating budget), the measure as structured almost completely fails to confront the dual nature of long-term capital expenditure, which is that each new project, from the smallest park to the most grandiose transit line, always costs money to operate and maintain.<\/p>\n

It\u2019s interesting to note, in light of the mayor\u2019s move to frame the terms of the debate, that city manager Peter Wallace yesterday released the latest staff report<\/a> on the city\u2019s financial problems, and his thoughts about a long-term financial plan, which, he says, will land in the second quarter of 2017.<\/p>\n

The document includes this telling list of bullet points (page 11):<\/p>\n