Archived columns and blog posts by Matt Elliott

Did Rob Ford save a billion dollars? For the billionth time, no

By: Metro Canada Published on Tue Apr 29 2014

Let’s recap.

Early in 2013, Mayor Rob Ford launched his claim to have saved Toronto $1 billion. I spent a lot of time dealing with this claim, because it made no sense and appeared to be based mostly on magic. But Ford continued to make it, often asserting that city manager Joseph Pennachetti and chief financial officer Rob Rossini supported his numbers.

Then, late last month, a twist! The city released a report that seemed, at first glance, to sort of justify Ford’s claims. This was troubling, since a closer read suggested the report was more than a little political while lacking context. Yesterday, city staff seemed to acknowledge that the previous report was flawed, because they released a do-over.

The new version decidedly does not back up Ford’s billion-dollar claim while also showing that Ford’s fiscal achievements are not dramatically different than what was achieved by Mayor David Miller and the previous council between 2007 and 2011. Pennachetti went as far as to say that Ford’s billion-dollar savings boast was “misleading.”

Ford, of course, responded by challenging Pennachetti to run for mayor. He also sent an email out to his supporters, claiming that the new version of the report continues to validate the triumph of his economic record. At this point, with the facts against him, the mayor is grasping at straws. Here’s a quick response to the points Ford makes in the email, as he continues to tout a fiscal record that simply does not exist.

The City Manager and CFO released documents today further showing the success of my administration in saving money for the taxpayers of Toronto. We have helped keep over $1.1 billion in the pockets of the Toronto taxpayer.

They did not. In fact, “$1.1 billion” does not appear anywhere in the document. In addition, if it was true that Toronto taxpayers had collectively kept $1.1 billion in their pockets over the last four years, it would mean that the average Toronto household would have an extra $1049.74. Ask yourself: Does your family have an extra $1,049.74? What did you spend it on?

As always, Ford’s fiscal claims hinge on two things. The first is saying things that aren't really true and then trying to find plausible justifications for those statements later on. The second is an assumption that had Ford not been elected mayor, the city would be run by, I guess, an illiterate communist with no knowledge of math who would have jacked property taxes by more than 10 per cent every year. Just for fun.

The Miller administration was heavily reliant on one-time provincial funding. This is not a responsible way to run a business, and it is not the way we want to run our City. We need to know that we have the tools in hand to keep our City balanced, sustainable, and affordable.

Reliance on this kind of provincial funding was eliminated by the end of Miller’s term. The source for that fact, by the way, is the very same report Ford is attempting to debunk by writing to his supporters. It’s on page three.

In 2009 alone, the graph released by the CFO's office shows over $200 million in unsustainable, one-time provincial funding. Funding which is no longer provided, and without the efficiencies found, would have forced a higher tax burden.

OK. But David Miller was mayor through 2010 and the 2010 budget was balanced without one-time provincial funding. The Miller administration found the “efficiencies” needed to eliminate the reliance on this funding.

My administration has seen almost $900 million in reductions and collective agreements – that's nearly $350 million more than the previous administration.

Here, at least, Ford is using real numbers. But let’s unpack these a bit because the report combines some pretty disparate totals to get these figures.

Between 2007 and 2010, savings from collective agreement negotiations totalled $174 million. Between 2011 and 2014, the total was $138 million. The Miller administration wrangled more savings from Toronto’s labour unions than the Ford administration.

The Ford numbers also include $60 million in service reductions and $81 million in reduced capital financing, neither of which fit the strict definition of efficiencies. A more apples-to-apples comparison of the efficiency and base budget reduction savings shows $612 million for the Ford years and $371 million for the Miller years, for a difference of $241 million, which is roughly $60 million a year.

But it’s important to think about where those savings came from. Page 15 of the report has some examples. For example, $40 million comes via savings on the cost of diesel fuel at the TTC. Another $54 million came because the provincial government allowed the TTC an exemption from pension solvency requirements. I don’t want to discount the importance of these savings measures, but I’d suggest they’re hardly what voters think about when they consider Ford's savings or efficiencies.

Over the last four years, we have seen TTC fare increases that are, on average, half that of the previous administration.

A bizarre statement. It focuses only on increases to the cost of tokens and ignores that, during the Miller years, revenue from increased fares was going toward enhanced service whereas the past four years have seen service cuts and a falling operating subsidy.

The more relevant number comes when looking at how TTC fare increases were used to deal with budget shortfalls. Between 2007 and 2010, TTC fare increases contributed $79 million toward the budget pressure. Between 2011 and 2014, the figure wasn’t much different, but was a bit lower at $71 million.

Residential tax increases are at an average of 1.7 % – again, less than half that of the previous administration of 3.6 %

The overall average tax increase in our City has been half the rate of inflation, at 1.1% – compared to 2.53% over the Miller administration.

These, at least, are true numbers, but they’re skewed a bit by the property tax freeze delivered in 2011. That tax freeze is widely acknowledged to have been only possible because of the massive budget surplus left to Ford by the Miller administration. The report, in fact, notes on page 11 that reliance of prior-year surplus dollars peaked with Ford’s 2011 budget. In comparison, the budget to be inherited by council next term will definitively not come with a giant surplus facilitating an easy tax freeze.

For what’s it’s worth, if you remove that budget year from the comparison, the residential property tax difference goes to an average of 3.6 per cent for 2007-2010 and 2.24 per cent for 2011-2014. So in real dollar terms, the average residential tax bill went up by about $77.50 a year under David Miller’s second term and $55.46 a year under Ford — for a difference of about twenty bucks.

Draws on operating surpluses and reserves have decreased from $834 million to only $571 million.

Yes, though the report notes this was helped along by land transfer tax revenues that increased by $179 million over the last four years. Despite Ford maintaining that he wants to eliminate that tax, his budgets have been heavily reliant on its increasing revenues and he’s never come up with a plan for how he would balance the city’s budget were the revenue to disappear.

My administration will continue to push for long term, sustainable funding from the Provincial government, through cost uploading, restoring funding for transit operating costs, and a share of the HST.

But Mayor Ford, I thought the city had a spending problem, not a revenue problem?

Either way, the new budget document shows that Miller was dramatically more successful than Ford when it comes to wrangling money from the provincial government. Between 2007 and 2010, councillors and the mayor got the province to contribute $575 million more to the city. This term, that number is just $112 million.

The new documents confirm that we have found savings and efficiencies of nearly $940 million, and when combined with the Vehicle Registration Tax being eliminated, that is over $1.1 billion of the hard earned money of Toronto taxpayers that has been saved.

The documents do not confirm that. A generous reading pegs the Ford savings and efficiencies amount at $893 million, not $940 million. Ford seems to have added four-year savings from contracting out garbage collection in half the city to get his total, but that impacted the city's rate-supported budget — you pay for garbage via user fees — and not the tax-supported budget.

Adding the purported savings from the elimination of the vehicle registration tax continues to be incredibly problematic. Page 13 of the report notes that the elimination of the tax increased the budget pressure in 2011 by $48 million, which meant the city needed to find another $48 million in permanent cost reductions that year. Those savings would already be included in the totals presented in the report — Ford can’t just go and count the money twice.

Two things are clear at this point. The first is that Ford has not saved taxpayers a billion dollars. The second is that he will continue to say he has — he’ll even plaster it on the side of an old fire truck — no matter what anyone says. But the facts still matter, and it’s important to point out that they're not on Ford’s side.

They never were.

This post was originally published at on 2014-04-29T00:00:00.000Z

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Matt Elliott

City Hall watcher, columnist and policy wonk in Toronto.
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