2020 City Budget: Digging into the Staff-Recommended Budget

Last week, the Budget Committee completed its review of the 2020 staff-recommended budget. The committee and visiting councillors had an opportunity to hear from City staff, ask questions of staff, and request further information through briefing notes. This week, the Budget Committee splits into two subcommittees to hear from members of the public about their priorities, concerns, and ideas for the city and the 2020 budget. Public deputations are taking place at Toronto City Hall (Monday), Scarborough Civic Centre (Monday), North York Civic Centre (Tuesday), and Etobicoke Civic Centre (Tuesday). For details on the deputations and other budget events, check out our City Budget Watch home page.

 

A FEW OBSERVATIONS

Increases to the City Building Fund have not eliminated the City's revenue problem - on the capital or operating side. The Mayor's proposal to increase the City Building Fund, a property tax levy, in 2020 and over the next six years will allow the City to borrow an additional $6.6 billion to fund affordable housing and transit infrastructure. It's an important step in the right direction but City budget documents show that it will not solve the City's revenue problem.

Despite this important infusion of capital funding, the City's state of good repair backlog is set to increase over the next decade. (State of good repair (SOGR) is the "cost of maintaining assets to ensure they are able to support the delivery of City services and meet service outcomes".) For example, the SOGR backlog for Toronto Public Library is set to increase from $103 million in 2019 to $167 million in 2029; for Parks, Forestry & Recreation, it is expected to increase from $556.9 million in 2019 to $659.6 million in 2029; for major and local roads (excluding the Gardiner), bridge rehabilitation, and laneways, the repair backlog is expected to increase from $1.07 billion in 2019 to $3.96 billion in 2029. The City's infrastructure cracks are set to widen over the next decade.

Revenue raised through the tax levy for the City Building Fund covers capital costs only, which means other revenue sources are needed to improve operating funding for City programs and services.

Our city has serious challenges that require more funding to address. SPT's recent report, "Toronto After a Decade of Austerity:The Good, the Bad, & the Ugly", lays out the troubling state of affairs with respect to affordable housing, child care, and public transit, cycling and walking. Council has options; it needs to take the next step to fund a better city.

Savings & efficiencies. The budget includes $27 million in efficiencies, $108 million in program/agency savings, $61 million from budgeting to actuals, and an additional $51 million in savings over 2 years related to implementation of the Value Based Outcome Review. The budget presentation didn't include many details about these efficiencies or savings. We would like to know more. What exactly do these reductions entail? Will City staff be properly resourced to do their jobs in providing programs and services to residents? Will communities, particularly neighbourhoods, groups, and residents who are struggling, be adversely affected by these decisions? The City reports that these budget reductions will not have an effect on City service levels. We think there should be a close examination of these reductions. 

A hole in the budget. The budget includes $77 million in unconfirmed federal funding to cover the cost of shelter and homeless services for refugees in Toronto. Last year, the City asked the federal government to contribute $45 million to cover these costs, which it did. This year, they have calculated the full costs and are asking for an annual commitment of $77 million from the federal government. Budget Chief Gary Crawford has said that he is "fairly confident" that the federal government will come through with the funds. If it doesn't, the City will need to cover the costs with its reserve funds in order to balance the budget. Unlike the provincial or federal governments, municipal governments are required to pass balanced budgets where the money spent is equal to the money raised. 

New approach to City budgeting. For the first time, the City budget documents compare the operating budget (amount to be spent in 2020) with the actuals from the previous year (the amount spent or projected to be spent in 2019). In the past, the budget documents would compare the current year's operating budget with the previous year's operating budget. This new approach raises some questions. For example, if a division underspent its operating budget in 2019 and the 2020 budget is set at a level that is the same as its 2019 actual, it will appear that the budget has been frozen (2020 budget = 2019 actual). Using the previous method, if the 2019 budget was underspent and the 2020 budget was set at the same level as the 2019 actual, the budget documents would show a reduction (2020 budget < 2019 budget).

Perhaps, it makes good sense to compare current budgets to previous actuals but it would be more transparent to show the budget documents using both old and new methods. This would allow for a more informed debate at Council about the funding of City divisions, agencies, boards, and commissions. We're going to have a closer look at the numbers to explore this issue further.

 

BRIEFING NOTES IN THE WORKS

On Friday, the Budget Committee voted to request briefing notes on a variety of topics. City staff prepare briefing notes according to the direction of the Committee. These notes provide City Council and the public with more information about issues relevant to the budget process. Most briefing notes will be available by January 28 when the Budget Committee has its wrap up meeting. Some more detailed notes will be available by February 4 when the Budget Committee has its final wrap up meeting.

The topics are wide-ranging, covering Children's Services, Shelter, Support and Housing, Housing Secretariat, TTC, Transportation Services, Toronto Paramedic Services, Financial Planning, Engineering and Construction Services, Social Development, Finance and Administration, Toronto Public Library, TCHC, Corporate Accounts, Municipal Licensing and Standards, Parks, Forestry and Recreation, Resilience Office, Economic Development and Culture, Environment and Energy, Toronto Police Services Board, Service Levels, and Other Issues.

Check here for the details.

Find all completed briefing notes here (click on the All Briefing Notes tab). There are 6 already available. Topics include user fees, net zero buildings, equity impacts of the budget, budgeting for accountability offices, TCHC funding for office of the Ombudsman, and pre-conditions for ranked ballot elections.

 

DON'T MISS "POLITICAL BLIND DATE" - TVO, TUESDAY AT 9 PM

Great news! TVO's Political Blind Date launches its 3rd season on Tuesday, January 21 at 9 p.m. with a story that's close to home.

"Gary Crawford (Ward 20, Scarborough Southwest), Toronto Councillor and present Budget Chief, and Shelley Carroll (Ward 17, Don Valley West), Toronto Councillor and former Budget Chief, kick off the third season by taking a close look at how to best manage a budget shortfall at City Hall after provincial funding cuts. Crawford doesn’t want to raise taxes or create new ones and believes in finding efficiencies. Carroll believes that new revenue tools are needed to pay for the city’s growth."

Thanks to Melissa Goldstein for sharing this fantastic news.

Up next ... we take a look at the city's housing and homelessness crisis & the 2020 budget.

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