Yesterday, the Star's Royson James wrote a scathing and cynical followup to the Mayor's surplus announcement (see Surprise! City bolsters budget with surplus New money pushes excess funds to $350 million, cuts property tax increase by $23 per home).
His take is more damning than our post below but we seem to be sharing the same mindset
(UPDATE: in Friday's MIRROR, the previous budget chief, David Soknacki writes BEYOND THE HEADLINES: Vigorous debate needed on how to pay for services. He says "... residential property tax payers will continue to enjoy the lowest tax rate in the area with a reduced increase. And finally, $75 million will be used so that next year's anticipated deficit will start at about $400 million. These decisions illustrate clearly that next year's opening position for our city finances is not viable. " (italics added for emphasis on strangeness of reducing keeping tax rate down rather than starting next year with some money in the bank!)
We can see all of the city budget staff working extra time to put a new face on the "staff recommended" 2010 budget documents.
We should be asking whether the city will go through another round of public consultations. They seem needed due to the magnitude and directional change of the mayor's announcements.
So far the mayor, budget chief representing this ward or any member of the Executive Committee have NOT provided appropriate insight into the magical money hat that has been found in the city hall treasury.
We must wonder how any one can go into the budget process for the next year without having the results from the current year tied in to its budget line by line!
Instead of magic we thought that the city would invest in sound financial management and reporting systems to run our city and be able to report on the differences between city plan and its actual results. We must also wonder how the city can go so deep into the budget process without having good estimates of the year end results from city and ABC operations.
Granted the unexplained differences or surplus on a $9 billion budget of about $310 million is less than 3.5% of total budget and about 3.5 times the announced 4% residential property tax revenue increase of $87 million. Looked at in another way, the residential increase is less than 1% of total. Some might consider this balancing just a rounding error.
Should the early presentations pursue the legal requirement to "balance the budget"? This seems too rigid if the city cannot work out the final bottom line numbers with greater efficacy in time for public presentation.
Given that the city collects property taxes before setting the final budget based on last year's values the final balancing act should come after setting all other items and be the outcome of council's final decision.
But this digresses from the point made in the post below. The city needs an improved and more timely financial reporting system (that would also likely change the culture and character in the city's finance department and that of the ABC's). Such a system would allow the budgeting process across all departments and agencies to be on top of things by knowing how the state of finances is working out and to understand differences from the prior year's plan and results and make appropriate accommodations whether for a 1 year or multi-year operations cycle.
The next mayor should be pressing for this change and more.
We need to know the likelihood that the city could run a surplus or deficit_since forecasting to a "balance" position is problematical. We know that smart budgeting builds in contingencies (especially, for the downside). We know that historically, Toronto and its pre-amalgamation components managed to build reserve accounts.
We also need to know the list of projects for the future that did not make the current plan. Going to multi-year forecasts will help here. But why did Miller wait until the last 8 months before an election to introduce a notion of even a 2 year operations cycle and set up arrangements without a broader discussion?
Is it now out in the open that the so-called "Budget Committee" is just a remnant from the past and that the mayor's office directs all budget matters? Should this committee be abolished? Should professsional staff in the mayor's office assume responsibility for all the background preparation? Should an independent Council Budget Officer be set up to report to and aid council on budgetary and other fiscal matters_ such as the Parliamentary Budget Officer in Ottawa?
Maybe Miller has opened a pandora's box for change and improvement as his lasting legacy.
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