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Tuesday, July 29, 2014
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Woes or whoa’s?

Surprise budget surplus has council refocusing
By Karolyn Coorsh

Originally published in our Riverdale-East York print edition(s).

It’s time to stop the doomsday talk about Toronto’s financial situation and start responding to the needs of the community when it comes to city budgeting, Ward 31 councillor Janet Davis says.

Davis was reacting to a surprise surplus of almost $293 million from 2011’s budget, nearly double that of earlier revenue projections.

The windfall was in part a result of larger-than-anticipated returns from a hot real estate market, an increase in TTC ridership and a hiring slowdown at city hall.

Davis said the administration’s talk of a $500-million deficit at the budget process outset was unfortunate because council ended up spending months debating unnecessary cuts to programs and services.

Revenues must be predicted accurately and earlier, “so we don’t go through the-sky-is-falling scenarios year after year that force us to cut programs that don’t need to be cut,” she said.

Leading up to the 2011 budget process, Mayor Rob Ford commissioned a review of the city’s core services and then directed all city divisions to cut their budgets by 10 percent. The review and ensuing draft budget drew unprecedented protest from citizens concerned with the prospect of losing valued services.

In Davis’s ward, residents protested a variety of proposed service cuts, including municipal pool programming at Gordon A Brown Middle School.

On budget day, about $20 million in proposed cuts were reversed by a faction of councillors.

Davis says the budget system is not functional.

“We’ve been working to protect the service levels we have,” Davis said. “We haven’t even considered the growth of the city and the needs of communities like we should.”  

Since the budget was passed, council has made further adjustments and corrections to budget items. In April, council delayed by a year the implementation of a new user fee for sports fields for child and youth leagues with the promise to revisit the user fee and examine the potential for upgraded sports facilities.

But Davis said the surplus numbers should no longer come as a surprise, as the city has been historically underestimating sustainable revenue.

“We’ve got what appears to be a structural surplus,” she said. “For several years now, we’ve had surpluses in the range of a quarter of a billion dollars every year.”

Davis also said the budget process in the last few years has been too compressed.

“I think the rushed budgets in 2010 and 2011 have made it impossible to have adequate community consultation or informed decision-making,” she said.

Calling the budget process an “exercise in emotional highs and lows,” Toronto-Danforth councillor Mary Fragedakis echoed that sentiment.

“There’s got to be a better way of doing these things,” she said. “You start off in a panic.”

Davis said the city is broadening the revenue base to taxes that grow with the economy, which can only lead to further sustainability.

“I do think what will happen is there will be far more questions about the revenue side for the 2013 budget so that we can be less insistent on huge budget cuts.”

In a report that was to be presented to budget committee on May 7, staff recommended the majority of the surplus be devoted to the TTC’s capital projects and the tax rate stabilization reserve fund for 2013.

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