How Do You Downsize a City Budget?
If you were the mayor of a large city and had inherited a bloated budget, how would you reduce the gap between revenues and expenses? Would you:
a) Talk incessantly about the "gravy" in municipal budgets?
b) Refuse to attend a significant public event?
c) Allow yourself to be photographed with feathered, bikini clad dancers?
d) Muse openly about closing libraries and a historic urban farm / zoo?
e) All of the above?
Or would you work quietly with senior staff to identify the main cost drivers, e.g. transit and policing, and find ways to price them according to usage and improve operational efficiencies?
The City of Toronto commissioned a KPMG report which introduced a smorgasbord of ideas, from harmonizing pension plans to outsourcing payroll. As I read through the ideas reported in the press, I was struck by how difficult to implement many of them were and how doubtful the savings would be. Integrating the accounting computer systems of the services operating at arm's length to the city is a worthy goal, but it will take years and I, for one, am doubtful that it will save significant funds. In fact, the upfront costs are likely to be significant.
The city has an immediate shortfall of over $700 million. This isn't a case of making a public show of cost-cutting zeal. This is business. Toronto's transit system is crumbling due to a lack of capacity and insufficient maintenance. Its budget deficits are covered by government. As hard as this will be to swallow, having one fare for the whole system is no longer supportable. Other cities have fares based on distance travelled. It's time for Toronto to do the same.
If you were the mayor, what would you do?