[attach]3949[/attach]The City’s budget for 2011 has now been approved. As challenging the work on that project was, the work that lies ahead in connection with the 2012 budget promises to be far more difficult.
Here’s why: Over the past seven years, spending on operations at city hall grew by about 50 percent (from $6.2 billion in 2002 to over $9.3 billion in 2010). Worse, the growth in revenue fell significantly behind spending, requiring ever-increasing reliance on the use of reserve funds and one-time intergovernmental transfers to balance the figures.
As the revenue-generating capacity of the property tax base became increasingly strained, the city turned to additional revenue sources, such as motor vehicle licence fees, land transfer tax and substantial user fees. Yet the gap between spending and revenues has continued to grow. The spread is now three-quarters of a billion dollars on a total budget of about $9.3 billion.
This trajectory cannot be sustained. The time has come to bring sharp focus to bear on the rate of spending.
Past budgets have sought out new and creative ways to keep putting more and more water into the bucket; we can expect the coming budget process to be an exercise in identifying leaks in the bucket and plugging them.
A modern city such as Toronto is expensive to run. There is no escaping that reality. All the more reason why we must make every effort to ensure that each taxpayer dollar works as hard as it can delivering the results that the taxpayers expect.
Taxpayers expect their council to find and reduce misspent dollars wherever possible and look for new and more effective ways to deliver the services they need. They will also expect council to take a hard look at services that can’t be justified in view of the costs involved, or make better use of the assets available. Does this mean privatization? Does it mean alternative service delivery (contracting out of services)? Too early to tell. What we can count on, however, is that these measures will be placed on the table for consideration as every effort is made to bring spending into line with revenues.
As a member of the budget committee, I will be working to find the right compromise that will allow the city to close the budget shortfall without irresponsible tax increases or cuts to services.
The hard work is about to begin.