Disclosure of New Sick Pay Liability Demonstrates &#039;Monopoly Money&#039; Mentality at City Hall
When I read in the Toronto Star yesterday that the City of Toronto’s sick pay liability was actually $450 million, not $250 million as discussed during the 39 day strike this summer, I was a bit stunned. Decisions were made on a much lower number, and while I didn’t believe the City should walk away from existing liability to workers, it would have been nice to know what we were actually talking about when forming those opinions. Reading the amount of confusion the City seems to have in understanding a) how they were off by $200 million, and b) the various explanations for the addition $200 million in liability; it demonstrated a total lack of concern of taxpayers dollars.
Blaming it on a software error is not only an epically weak excuse, but it fails to recognize the serious repercussions of the error. Consider for a moment that between this, and the LRT deal this Council signed during the strike, they added $600 million dollars in future expenditure (read budget shortfalls for later) in less than 30 days. The LRT financing was something the City developed and voted on in less than 24 hours, adding $400 million dollars in totally unplanned spending to the capital budget. These actions are simply irresponsible and demonstrate a lack of appreciation for what it is they are tasked with doing.
Consider that each additional $30 million of revenue this Council adds to the expenditures, a 1% property tax increase is needed. This Council is already facing a staggering $500 million dollar budget shortfall in 2010. In 2003, the City of Toronto had a $6.4 billion dollar operating budget, by 2009 the annual operating budget is $8.7 billion dollars. This is a 35% increase in annual operating expenses over six years, with little or nothing by way of service improvements to show for it.
I do believe government spending can be positive and targeted in a way to have a demonstrated value for residents.But ,I become very concerned when I look at staggering numbers like this and realize that through the irresponsible spending we’ve watched at the municipal level in Toronto, we now have a chronic budget shortfall, no real service improvements to point to in exchange, and quite likely some service cuts on the way.
City Council needs to get real, and recognize they are putting Toronto on the path to bankruptcy. They need to actually think before the spend, to revisit previous priorities and announcements to determine if funding and projects are meeting their objectives and if not, make some decisions about deployment of resources. If we start the process now, it doesn’t need to be painful, but if Council waits until the situation is entirely out of control, they will be forced to cut deep into both the operating and capital budgets in ways all citizens will feel.