It's not the big news story most people seem to want the Ford brothers to address, but I'll take it. On their Newstalk 1010 radio show last Sunday, Mayor Rob Ford and his brother Coun. Doug Ford indicated they'd soon provide an accounting of how exactly they've saved the city a billion dollars.
I'm glad to hear it. After I published my analysis of the Ford fiscal record last week, others picked up the torch and started to ask questions, too. Basically, the question is this: you Ford guys keep throwing around this billion-dollar figure. What's up with that?
I had speculated that the number had to do with a bogus analysis by the right-leaning Toronto Taxpayers Coalition, based on absurd hypotheticals. But when the Fords started talking about the issue, it became clear that it's not so cut-and-dried.
On air Sunday, after promising to “get our list” and “lay it down” in more detail on next week's radio show, Doug Ford clarified that he gets to a billion dollars by looking at accumulated savings over the mayor's four-year term.
So this claim isn't about reducing the city's operating budget by a billion dollars — it's about saving an average of $250 million per year. OK.
By way of example, Doug started with an old favourite: “As soon as you got in office, Rob, the car registration tax — we eliminated it. That's $65 million for one year. You multiply it four years — we're coming into our fourth year in January here — that's $260 million.”
Well, sorta. Cutting the vehicle registration tax cut into revenues, not spending. The move caused the city's budget gap to get bigger. Sure, in a legislated zero-deficit budget environment like municipal finance, any revenue cuts need to be offset with either an increase in revenues or budget savings, but that doesn't mean you get to claim cuts to revenue as immediate budget savings.
And you certainly don't get to take same-year figures for both revenue cuts and spending cuts, multiply them over a four-year term, add them together, and produce a giant number labelled BIG TIME MEGA SAVINGS.
But Doug Ford continued.
“$100 million in efficiency savings!” he crowed. “That means, folks, in 2011 there was $100 million in savings. That means there was also $100 million in savings in 2012, in 2013, 2014… and we're not even compounding this! Right off the hop, there's another $400 million.”
Quick clarification. City budget documents indicate that the 2011 budget — Ford's first — was balanced with just $57 million in cost reductions. But, hey, why not round to the nearest hundred million dollars?
Even ignoring that, there's a lot of problems with this accounting. The Ford camp is essentially giving license for the previous administration to claim they also saved the city hundreds of millions of dollars. After all, former Mayor David Miller delivered gross operating budgets with efficiency savings of about $102 million in 2009 and $167 million in 2010. But the Fords called that fiscal mismanagement.
Doug also brought up the administration's record on garbage, where partial contracting out of service should mean savings of about $44 million over the course of the term. Which is fair. But then he also pointed to the mayor's successful push to designate the TTC as an essential service as a driver of budget savings — something that doesn't appear to make any sense.
The radio segment continued with a long digression about how the Fords value “front line people” and how it's those people that have helped bring cost savings to City Hall. Finally, the mayor finally brought things back around to the issue of the billion dollars in savings.
“You've [listed] over a billion dollars right there – easy,” said Rob of his brother's budget summary.
But Doug promised to bring more budget details next week. I'm looking forward to seeing how the numbers add up.
This post was originally published at http://www.metronews.ca/views/toronto/ford-for-toronto-matt-elliott/2013/06/05/still-asking-questions-about-the-ford-brothers-billion-dollar-savings-claim.html on 2013-06-05T00:00:00.000Z