Russ Ford's Blog

Let's Get Serious About Transit Funding

This  week   the mayor said Toronto's transit problems can be solved using money the city gets from the proposed downtown casino.  We also got a report from the Parks and Recreation Department which indicates they see great potential in refurbishing the city's parks through private fund raising.  Welcome to the new age of municipal financing.

The mayor's plan to get Toronto moving through gambling revenues has no credibility.  Even the most optimistic projection of casino revenues put it far below the city`s transit needs. It is similar to his plan to build more subways by engaging the private sector.

In the world of politics this is called pandering.  Telling people what they want to hear, not what they should hear.  In this case it is telling people that Toronto can have a modern transportation system fitting a city of this size without really having to pay for it.

The mayor is not alone in this political game.  Conservative leader Tim Hudak says he will fund  transportation by cutting government waste and NDP leader Andrea Horwath says she will do it largely by closing corporate tax loopholes.

Like the mayor they  all claim they are going to get Toronto moving without it costing any of us money. 

Can we please  have an adult conversation about taxes.  Our transit system has been starved for money for many years because of politicians who refuse to acknowledge the basic fact that public services cost money and if we do not invest in public services they will decline and likely cost  much more in the long term.

It is sort of like your  house.  You can put no money into its maintenance but eventually the furnace will break and the eaves trough will start to fall down.  Then you will pay and pay a lot.

We are not taxed fairly but we are certainly not overtaxed.  The neo liberal economic agenda that was initiated  under Mike Harris and has continued   has dramatically reduced the taxes most of us pay.  The tax system has also been restructured  strongly tilting anyway from the notion  of equity.  You might pay a bit less in income taxes today,  but your rich uncle is paying a lot less than he did ten years ago. 

To  make op for the  revenue loss,  governments have slapped  user fees on most of its services. User fees are a form of regressive taxation.  Everyone pays the same for a service no matter their ability to pay. Parks and Recreation  fees for example  are now at the point where many families can no longer afford to have their children participate.  These services were free in the City of Toronto prior to amalgamation.

The city has no ability to raise money through progressive taxation.    Its main source of revenue, the property tax, is also regressive as it is based on the value of your house not your ability to pay.  A senior living in the family home may be sitting on a valuable piece of property and be taxed accordingly but have no other income  except for pension benefits.

 So what to do?

Well the Premier has suggested  she would support a host of tax measures including road tolls, a gas tax and parking fees. Money received from these initiatives would be like the mayor's casino money dedicated  to addressing Toronto's transportation problem.

Dedicating revenues to a specific project or budget line  is a way for politicians to protect us from them. What they are saying is, ``I know you do not trust us to manage your money so we promise that all the money raised will go into something we know you support, an increase in Toronto's transportation capacity.``

While our distrust of politicians on the transit file is well earned, this is just another form of pandering.  If dedicating tax revenues becomes the norm, politicians will continually do    what is popular  and not what is needed.

What this does do  is reduce political accountability.  If casino revenue for example,  is  predetermined to be applied to transit, then that money is no longer part of the normal public debate around the city budget.  Politicians can tell people they would have preferred to do something else in  their ward  but could not because the city budget now has so many pre determined allocations

Governments need to be able to  raise the revenue they need and all of those revenues should be part of a public budgeting process.

Revenues should  largely  be gathered through progressive taxation which means a reduction on consumption type taxes or user fees and a return to the notion that people pay according to their ability to pay.  At the moment the city has no ability to generate funds through progressive taxation.  Isn't it time we recognized that  contrary to the beer ads we see on television, a vast majority of Canadians live in urban settings. Isn`t it time the cities receive a portion of the money raised through income taxes.

Progressive taxation is sure a much better way forward than turning our Parks and Recreation department into a charitable organization.  The competition for charitable donations is tough enough with most going to the diseases like heart and stoke and cancer.  We do not need another large organization like the City of Toronto Parks and Recreation department scrounging for donations.  The pot is only so big and this foray could  undermine the viability of  some of the smaller charities.

And what does this do to the concept of equity within our parks.  Will the city take the donations and share them in all the parks.    A charity must use the funds for the purpose  the donor specifies.  So if a group of people in a more well to do area of the city specify that their donations must go to their local park, where does that leave the parts of the city that have  less donors.  Will we end up with park service's differentiated by the income level of the community they are in. 

Further,  to be charity you must be publicly accountable and have a  real board of directors.

Parks and Recreation does not exactly have a great history of playing well with communities.  They do not have any process for meaningful community engagement and   to become a charity they would have to entirely change the way they manage themselves.

My guess is they want the donations but not the accountability that goes with it.

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