Speaking to reporters on Monday, Mayor Rob Ford credited the city's recently-announced $292 million budget surplus to… um, himself, mostly. “This tax-and-spend mentality of the previous administration is over,” he said. “People know I mean business. I was elected to find efficiencies and that's what I've done.”
Budget chief Mike Del Grande echoed the mayor, claiming Ford's surplus differs from the year-end windfalls delivered by Mayor David Miller in the last years of his term because Ford's extra cash comes from savings, as opposed to revenue growth. We're back to the idea that Miller, the budget incompetent, found money under the couch cushions.
But really: that's not true.
A close look at budget variance reports for 2010 and 2011, reflected in the chart above, shows that Ford's first surplus looks a lot like Miller's last surplus. In both cases, the major piece of the windfall comes from the Land Transfer Tax. It's the gift that keeps on giving.
Beyond that, both mayors deserve credit for pushing cost containment across city departments. Miller's hiring slow-down in 2010 delivered an extra $40 million to the city's surplus. Ford has ramped that up, aggressively capping staff levels, resulting in savings across many departments. But if there's been a difference in the scale and effectiveness of their differing approaches to cost containment thus far, it's not evident in these staff reports.
The police and TTC also helped build the surplus in both years, with higher-than-anticipated TTC ridership continuing to be a consistent driver of extra revenue. In addition, the city continues to maintain a healthy investment portfolio that outperforms estimates.
And in both cases, some of the surplus just came down to luck. Winters were lame both years.
Ford and Miller may stand on opposite sides of the galaxy in terms of policy, but it's hard to find major differences in these reports. There's little evidence thus far that this new mayor has brought a new approach to the city's finances that has seen big payoffs. His predecessor's fingerprints are all over this surplus.
Next year's budget outcomes could look different. The 2011 budget, while Ford's first, really wasn't crafted with much care. That was the point. The idea, as reported by the mayor's advisors, was to deplete all surplus funds and available reserves, thus opening the door to a more austere budget in 2012. Hence the Core Service Review. Hence $774 million being bandied about like a ticking time bomb.
This strategy was only a marginal success. They screwed it up.
But no matter what the numbers look like next year, watching the budget process develop under Rob Ford should cause City Hall watchers to take a closer look at David Miller's fiscal legacy. For someone branded a tax-and-spend socialist who made a mess of the city's finances, his budgetary policies still mean surplus, even a year after he left office.
The budget strategy left by Miller – and I credit his budget chief Shelley Carroll as well – was so well-formed and resilient that Ford's team struggled to create the fiscal crisis they needed in order to force cuts and drive austerity.
I don't mean to play cheerleader: Miller's government had a lot of problems. Somewhere along the line he lost his ability to connect with the average Torontonian. And there's still a long way to go toward fixing the city's fiscal foundation, which isn't a matter of simple cuts and budget-shaping.
But the numbers don't lie. And Miller's numbers are looking better and better.
This post was originally published at http://www.metronews.ca/views/toronto/ford-for-toronto-matt-elliott/2012/05/02/ford-surplus-miller.html on 2012-05-02T00:00:00.000Z