Lawrence Solomon: Ford’s promised cuts are far too timid

(Oct 16, 2010) He could save more by privatizing hydro, ­water, parking and the TTC.

Toronto mayoralty candidate Rob Ford is bent on “ripping up” the city through deep spending cuts, says Sarah Thomson, a political opponent. “Attila the Hun is at the gates,” says Joe Pantalone, another opponent. Many in the press chime in on the catastrophe that would befall Toronto if Ford ever realized his goal — a spending cut of 2.5%.

They are all unhinged. Ford’s cut of 2.5% is timid beyond description. The debate over how realistic his plan is — even Ford sees it as challenging — shows how far Toronto politicians have gone off their light rails.

The new mayor of Toronto — whether Ford or one of his leftist opponents — will inherit a city budget that saw spending soar by 44%, or $2.8-billion, during Mayor David Miller’s stint. What have Torontonians gotten for that $2.8-billion a year? Little that anyone can point to, other than new garbage bins that few want and some streetcar infrastructure whose never-ending construction destroyed neighbourhood retailers.

The billions that Miller has squandered mostly vanished without a trace, most of it by fattening union members’ pay packets and promoting initiatives that feel good but do harm, such as barring merchants from giving their customers free shopping bags. Ford could hit his 2.5% target merely by tossing a handful of worthless initiatives from Miller’s grab-bag.

But he should aim higher, much higher than his cautious campaign platform proposes. For starters, Ford wants to sell up to $1-billion in surplus properties over his first four years, to lower the city’s debt and save some $200-million in annual servicing costs. Yet the city is sitting on more than 5,000 properties valued at over $12-billion. Why not a less timid approach of selling $2-billion, to save $400-million a year? Such sales would do double duty to Toronto’s bottom line by adding more private property owners, and thus taxpayers, to the rolls, in the process furthering lowering the tax burden on Torontonians.

Ford wants to contract out garbage collection. Good for him. That would save $50-million while improving service. But why stop there? Far bigger savings and service improvements could be had by in addition privatizing some or all of Toronto Hydro, Toronto Water, the TTC and the Toronto Parking Authority. Proceeds from such sales would help undo the damage of the Miller years while improving the lot of Toronto customers, who have had to put up with shoddy service at high cost.

To reverse the phenomenal growth in city staff — now approximately 50,000 strong — Ford plans to fill just one-half of the 3,000 positions that become open each year when city employees quit or retire. Why one-half and not one-third or even one-quarter, to pare back to an efficient level more quickly, and expect those remaining in the city workforce to become as productive as the workers in the private sector? Each reduction in staff saves more than the staffer’s direct remuneration (average $88,000 and growing) because of the office or other overhead required to support him. Sometimes the reduction is truly massive, as in the case of city planners. Planners, to justify their existence, continually need to dream up new projects for the city to consider.

A city that trimmed down to its core services would lower costs across the board for its residents, and not just in lower taxes. The city harasses thousands of businesses every day through legions of inspectors who demand to see everything from the designs of their exterior signs to their contracts with cleaning staff. Every inspector represents a hidden cost for the consumer, who must now pay more for his restaurant meal or his clothing, to cover the merchant’s cost of complying with meaningless regulation. Torontonians thus pay twice for many of the city services, or rather disservices, that city staff provides.

Ford says, “It will not be easy to end the gravy train, but I will do it.” To the contrary, it would be trivially easy to do for a mayor with the gumption to take his case to the citizenry.

Lawrence Solomon, October 16, 2010, Financial Post

This entry was posted in Privatization. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s