Saturday, September 13, 2014

The Ford Family Political Machine

The recent switch of Doug for Rob in the Mayor's race, and Rob for Michael in the Ward 2 race is in a sense shocking, but not surprising. Speculation about this possibility had existed for some time.  I see outraged talk about "feudalism" and family dynasties.  Good.  It's been apparent that the Fords were always about setting up a bona fide old style "Tammany Hall" political machine in Toronto.  Consider:
  • The radio show on CFRB 1010.  This was far underestimated by digital/online types in its significance.  Ford had a multi-hour open mic to the whole city every week, with no neutral "host" to direct the agenda or put any limits, and his brother to co-host.  It was qualitatively different from any previous Mayor's anodyne style of "civic engagement" shows on Cable 10 or CP24, hosted and generally just about run of the mill constituent issues & questions.  The Ford show was openly a dialog to "Ford Nation" and no political punches were pulled.
  • The network of donors, particularly out of the city in the rest of the province. This is the stuff of nightmares for Councillors.  It's pretty easy to imagine this network being given signals to drop a few hundred thousand (collectively) on a couple council challengers to incumbents who have upset the Fords, and maybe drop some more on any friendly councillors in trouble.  Ford wouldn't need to defeat every unfriendly councillor, just enough to scare the rest, especially the ones in marginal wards who won by close margins.
  • The enemies list. Yes, he has a list of councillors he wants defeated.  You don't assemble such lists unless you have plans to do something about it.
  • The robocalls. The radio show wasn't enough, Ford used these as a direct line to constituents. Again, probably undervalued by digital/online types, but for those key most-likely-to-vote older demographics who also aren't as often online, this is a key touchpoint.
  • The permanent campaign. I've written at length about this before, but basically Rob Ford never really stops campaigning. His obsession with constituent services is the most obvious aspect of this.  Numerous people in his city-funded Mayoral staff (like David Price) were focused solely on this.
All of these are the more-or-less visible aspects of the machine operation.  One may speculate, given what we know about Ford's various underworld friends & connections whether there was a much darker portion to this machine, a group of Nixonesque "plumbers" perhaps (think of the prison beating alleged to have been ordered by Ford). 

Once you accept the motivation of establishing a permanent political Ford family machine, many of Ford's policy preferences make sense:
  • Despite a much ballyhooed hatred of "gravy" - Ford has never said word one in opposition to the City program of rebating up to 75% of political donations, even to non-Toronto residents or voters. Even in the 2014 budget process where he was obviously unable to come up with anything like the $50-$60M in savings he promised he could, this juicy plum was left untouched.
  • His various attempts to eliminate the City's accountability officers like the Omsbud & Integrity commissioner. For a guy who makes such hay on the "gravy train" and being so very honest, it might seem strange that he was so vehement in opposition to mechanisms to hold politicians accountable to voters. But even as relatively toothless as these offices are, they have been a regular thorn in his side, and if they don't outright stop aspects of his political machine, they often issue reports ruling they are violations of various rules (like the robocalls to Ainslie's ward).
  • Hatred of 311 and other forms of city employed professional customer service help. Ford doesn't want government to just work, he wants constituents to need his help to get what they need from the city.  A simple, easy to remember number that can provide nearly any city service in one call or email really reduces your need to call your councillor or the Mayor for help with that leaky fire hydrant or unpatched pothole.  Those old enough to remember the "blue pages" part of the phone book may remember a lengthy list of city deparments & agencies one might have to navigate for services, a nightmare of waiting on hold, missed return calls & bureaucratic runaround.
  • Opposition to s.39 and any spending out of it. There are legitimate concerns with s.39 (funds contributed by developers held at ward-level under the direction of that ward's councillor for improvements to the ward) but obviously Ford would not like anything which allows Councillors to get improvements to their ward, and look good to their constituents without his blessing.  The funds do need City Council approval to be spent, but as Ford did not yet have a firm grip on Council as a whole, s.39 was a threat to him and his machine.  In particular, downtown and high density wards with the most progressive councillors tend to get the most s.39 money because they have the most development.
This is a partial list, not an attempt to be comprehensive, but the lens of "aiding my political machine" often allows otherwise strange Ford policy preferences.

The most terrible aspect of this, is that it probably would have worked except for the drug & alcohol problems. Absent that, it really is difficult to imagine he would not be sailing to re-election, and possibly getting a slate of "Ford Nation" councillors elected to solidify his control over council.  It was pretty clear for example, that the scheme with Doug not registering for election was to allow him to continue hosting the radio show this year, a plan only foiled by Ford's crack videos causing CFRB to cancel the program (they tried to resume it with Sun News and then via Youtube, both evidently failures).  The network of big money donors has apparently largely withered away, big money opting instead for the safer alternative, John Tory.  Rather than advancing their control over Council, the Fords were left fighting just to hang on (and losing even at that).

No, we should not be surprised that they "dare" swap Doug for Rob, and opt to have Rob hold the "safe" home base of Ward 2 (Michael was far from a sure win).  The political machine is down but not out, and they will fight ever to restore it unless defeated completely.



Saturday, September 6, 2014

Sadly, Tying Property Taxes To Inflation Is Progress

Earlier in the Mayoral campaign, with the unsurprising exception of Ford, the other four (then) "major" candidates (Chow, Stintz, Tory, Soknacki) solidified their positions on property taxes around a general consensus that such taxes should match inflation.

A number of people whose views I respect have written some thoughtful pieces on how this is bad public policy:
  • Matt Elliott argues that aggregate measures of inflation like the consumer price index can often be poor guides to what kinds of uncontrollable price increases city operating budgets may face, necessitating a larger-than-CPI tax increase just to maintain existing services. 
  • Cityslikr took Olivia Chow in particular to task over her pledge to say "around" inflation, given the real need for service improvements, many of which she is campaigning on, that won't plausibly fit within the existing city budget.
  • Marc Coward makes a similar point more generally, pointing to things like the growing unfunded TTC "state of good repair" project backlog, and the unfunded repair backlog at Toronto Community Housing.
Throw in a report like this one from U of T's Munk School municipal affairs institute which shows that Toronto's property taxes are low by any standard you wish to use, and have fallen over the past decade, and openly states Toronto "does not have a spending problem" and it's pretty clear all these people are right.  Property taxes do need to increase, and by more than inflation if we are to have the kind of city many of us tell pollsters and politicians we want.

Yet, I can't but see a political consensus that property taxes should increase every year in nominal terms to keep some kind of pace with inflation is actually progress.  The "original sin" of the amalgamated city is our first megamayor, Mel Lastman instituting a 3 year property tax rate freeze.   For those who understand how inflation works, the consumer price index for Canada increased over 7% during that same time meaning the city was (assuming its costs matched the CPI) funding programs & services that cost 7% more, while taking in no additional revenue.  Something has to give.

As the piece linked to in reference to Lastman points out, things did "give" under Miller, where we see the introduction of the vehicle registration tax and the (municipal) land transfer tax.  Perhaps Miller should have just pushed for a big "catch up" property tax increase, but in case, more revenue was badly needed.  In fact, the LTT has been so successful that it allowed Ford to irresponsibly return to Lastman era policies by freezing property taxes during his first budget, 2011.  That means, at that point, in 13 years of being a megacity, Toronto had frozen rates for nearly a third of its life.

Anecdotally I frequently encounter people who really don't get inflation (or how property tax rates work, hence pieces like this and this).  They see the dollar cost of their property tax bill go up, year after year, and see it as a burdensome increase, imagining spend-thrift politicians throwing wild parties with the "extra" cash, rather than just treading water in the ever rising tide that is inflation.  Of course, some people's incomes do not keep pace with inflation either, so it may actually be an increasing burden to them, but in the aggregate, inflationary increases should not be doing so on average.

The point is that politicians like Ford and Lastman are playing to a real constituency of people who intuitively think that property taxes should be nominally the same year after year barring some major new program like a new subway or something that would explain an increase (which politicians like Ford & Tory also try to claim they can do without a tax increase). 

In the face of all this, I can't but see a general political consensus from left to medium-right that property taxes should generally need to increase in nominal terms as some kind of progress.  I'm not clear that it represents better awareness in the general public on these topics (I doubt it), and would still look for the city to increase its revenue take from sources that automatically increase with inflation (like income taxes) so that the city's revenues are not so prone to demagoguery, but failing that, I'll take this as a good sign.

Wednesday, August 27, 2014

The "SmartTrack" Political Context

SmartTrack: Politician designed transit works surprisingly well...for politicians

To recap: John Tory has centred his Mayoral campaign on a promise to build a heavy surface rail (he calls "surface subway") electrified line 53KM long that mostly uses 2 existing GO-Transit non-electrified lines and builds 12KM of new track along Eglinton west into Mississauga terminating just south of Pearson aiport.  He claims to need $8 billion to build it, and expects the City, Province and Federal governments to each pick up one-third ($2.67B each).

Image by Tory parody account @JohnToryT0 (zero)

There are several technical (some, like capacity at Union station, quite serious) concerns about the viability of the specific route & stations he proposes, but more importantly is how such a large sum could be funded, several times more costly than any transit project in contemporary memory (possibly the Yonge or Bloor lines would be equivalant if you do the inflation adjustments). How does Tory expect to raise the cash?

Federal

This is the most mysterious part of the funding plan, that has received only scant attention.  Why does Tory expect to be able to get $2.67B out of Ottawa?  This is multiples of what Ottawa has ever provided to Toronto for any project.  There was dancing in the streets last year when Flaherty announced $660M for the Scarborough subway, and that wasn't some "favour" he was doing for Ford, it was money already allocated to Toronto out of an existing national infrastructure funding program that every city can draw proportionally from.  Toronto is probably due a bit more money from that program (the "Building Canada" fund) but I can't figure it to be more than a few hundred million.  If Ottawa is going to come through this will be net new funding.  Tory harps on his good relations with Harper, and 2015 is a Federal election in which the Tories are already trailing badly in the polls, so it's possible Ottawa will try to buy some GTA love but that's a lot of money for a city the rest of the country largely dislikes and the couple competitive seats for the Tories in Toronto may be cheaper to buy elsewhere.  Pinning all our hopes on this seems far fetched.

Ottawa has previously committed $333M to the Sheppard LRT project, which would certainly be available if the Sheppard LRT is put "below the line." More on this below.  Still, I can't even come close to $2.67B out of known pools of money for Transit from Ottawa.  This is a big problem for Tory and his blithe certainty that he can wrest vast sums on the strength of his personal connections should be viewed with skepticism.

Provincial

The re-elected majority Liberals have committed to a substantial long term GTHA heavy transit funding plan, so in principle there are the requisite billions of dollars in existence of budgeted money for Transit.  The issue is that those billions are spoken for in other, already planned projects.  Something would almost certainly have to be defunded in order to provide the $2.67B for the province's proposed share of SmartTrack.  Given the debt/deficit panic and various warnings of lowering Ontario's credit rating, and the government's election pledge to balance its budget by 2018-2019, it's almost impossible to imagine them agreeing to a new multi-billion dollar transit allocation for Toronto.

Another key fact is that the province has committed up to $12B to electrify the entire GTHA GO train network of 7 lines and provide 15 minute all-day service on them, aiming to do this in 10 years (which they admit is ambitious). 

Ontario has committed to frequent, all day service on all this, regardless of who is elected Mayor.

The vastly most likely thing to give way in this would be the approved & (currently) funded projects to build LRT lines on Finch avenue west & Sheppard avenue east, two Miller-era "Transit City" projects that died under Ford and rose again from the dead when Council overthrew his control over transit in 2012.  Between the two projects there is about $2.5B in current provincial dollars (plus the $333M Federal for Sheppard).  John Tory has made clear that not eating up precious lanes of road space for cars is his top priority (see his Eglinton Connects rejection statement) and even told Spacing back in May that he would push to "delay" these lines in order to make a "Yonge relief line" (which somehow later became "SmartTrack" but let's leave that issue) the priority for funding.  He was later quoted saying they "aren't his priorities."

More recently he told Daniel Dale in the Star that none of this was true and that he "supports" these lines being built and "has no intention" of asking to delay them.  Cynically reading between the lines, this leaves open the possibility that if the Province suggests yanking the funding to these lines, Tory would "reluctantly" agree.  He clearly is not going to go to any lengths or expend any political capital to see these lines built.  At best his position is "cancellation if necessary, but not necessarily cancellation."

Let's read some tea leaves here:  The province very likely does not want to build these lines either.  The Transit City master agreement was cut in early 2007 by the previous Premier's government, in the shadow of a fall 2007 provincial election in which the Liberals would be facing down an affable & charismatic conservative party leader by the name of John Tory, a well known "red" Tory moderate, the kind of guy who could bury the nasty reputation of the Harris years and return Ontario to its decades long reign of non-stop PC governments up to Bill Davis.  Tory even worked for Bill Davis himself!  Tory's 2007 loss is considered one of Canada's epic political blunders over the religious school funding issue, so it's not as if the 2007 era Liberals were wrong to fear him.

In short, Miller cut an awesome deal for the city in 2007, with a government that was afraid of what it was facing, and eager to shore up the key 416 ridings (often ripe for picking by the NDP).  The deal for these LRTs sees Toronto paying nothing to build them, not responsible for any cost overruns, and the Province even picking up the ongoing capital maintenance and sharing in the operating cost of the lines, which would be run as TTC lines.  In short: "Free" rapid transit.  Plus getting Ontario back in the game of funding some share of TTC operating costs is a big deal.  Higher governments aren't fond of paying operating costs for things they don't own/run, there's no glory in it.  Capital funding is fun, you get ribbon cuttings and comemorative plaques.  Operating funding is a budget item voters don't notice.

Add to that these are two rapid transit projects solely for Toronto of no practical use to those ultra key 905 ridings, where governments are made or broken in Ontario.  SmartTrack on the other hand is actually a regional line (and Tory says it would be run by Metrolinx, which likely means it will be branded as a GO Transit line), going to vote (and donor) rich Markham & Mississauga.  The incentives are all for killing these lines.

Sure, they'd call it a "delay" - but given that there are signed agreements in place (including with Bombardier for the LRT vehicles) there would be real penalties to any delay.  Further, any capital project put "below the line" of actual available funding is heavily unlikely to ever come back above.  At the very least you are talking about a delay of at least a decade before fiscal and political conditions might allow these lines to be refunded, and by then the EAs won't be valid and frankly the areas may have changed such that these projects no longer make sense anyway.

The original Transit City vision

You can scan the list of "Big Move" projects but you won't find anything else anywhere near as juicy a target.  Tory can deny this is where he expects the Provincial share of money to come from, but it's difficult to imagine it playing out any other way.

Municipal

Here the game is about the "Tax Increment Financing" (TIF) scheme.  Tory is pledging to raise $2.5B of Toronto's $2.67B share from TIF, under a never used 2006 Ontario law that actually currently can't be used because the province has yet to implement some key regulations on it.  The recent (must read, go, read it if you haven't) Marcus Gee piece in the Globe and Mail reveals that the primary intended beneficiary of this law was Toronto, but it has never been put into use because the city and province don't agree on how it should work.

The key dispute has to do with the nature of property taxes.  TIF schemes rely on the idea that if we build something good, the property tax draw from some area will increase more than it would have without building that thing, so let's assume that growth as securitization for borrowing the money to build the nice things.  It's something like a student loan: Loan me vast sums today so I can pay to educate myself, and pay back the loan from the high income I hope to earn with my fancy degree.

In Ontario, property taxes have two components:  A provincial share to pay for education, and a municipal share to pay for municipal government.  The property owner pays one cheque, but it is divided between municipalities and the province.  Toronto wants the TIF money to be loaned to the city by the province and the province to recoup the money out of increased property tax revenues on the provincial (education) share of the TIF area.  This puts the risk on the province, if the expected property value growth does not occur, the Province would have to deal with the fallout of reduced property tax funding available for schools (a common TIF problem in the US).  Naturally the province would prefer the city shoulder this burden.

Further, Tory's scheme requires more than doubling a limit Ontario put on the law that you can only TIF finance 1% of your normal municipal property tax take for your city.  Toronto's property taxes amount to about $3.7B so this is about $37M a year.  SmartTrack needs more than double that per year over 30 years to make the $2.5B.

It's hard to see how the province can agree to the city's position because in practical effect, in order to provide Toronto with $75M+ a year in TIF funds, Ontario would have to borrow this money too.  If the province's position wins out, the usual problems with TIF schemes for cities rear their ugly heads: You often end up depriving the future city of needed property tax revenues, particularly if the expected revenue growth does not materialize.

Again, Tory's answer here all seems to be that by dent of his great relations and awesome leadership skills, he can chivvy the province to agree.  I don't know what Plan B is if this fails.  Cancel the Scarborough subway?  He probably should propose doing that given how SmartTrack more or less makes that line redundant given the existing routing of GO lines in Scarborough, but unlike Finch & Sheppard, Tory has been definitive in committing to build the Scarborough subway extension, so it would be a big promise break to reverse on that.  But it would free up $3B in funding.

Who is Tory appealing to?  His messaging isn't as blunt as Ford's "downtown versus suburbs" war, but Tory has made dogwhistles to that, implying that he provides Transit to "all" Toronto not "just" downtown.  Naturally the point that the "downtown" relief line is of primary benefit to suburban commuters since people who already live downtown don't need rapid transit to get there is generally lost in the city's unfortunate urban/suburban divide.  Further, SmartTrack is calculated to appeal to drivers who want new transit, built in ways that doesn't close roads during construction, and that hopefully other people will ride so "their" roads get that much clearer. 

The Grand Context

SmartTrack is probably not, in isolation, a terrible project as potential transit lines go.  The grand context though is to ask "what are the alternatives? What else could we do with that money?"  At a (politician derived, unverified) cost of $8B, it is nearly as much as the TTC 2012 estimate of the "full" relief subway loop from High Park down to King, and across back up to Pape and all the way to the Eglinton LRT.  Given that the province will electrify the existing GO network and plans some kind of TTC fare integration, what are we really getting for our $8B?  A few extra stations, no need to change trains at Union to continue on to Markham or Mississauaga if coming from the other side, and those 12KM of new track along Eglinton into Missauga.  Oh and maybe it's built a few years sooner, if Tory's ungrounded pledges that it can be built in 7 years hold up.

The smart transit people I read all seem to say "electrifying GO lines is well enough, but we need that AND a relief subway" - and they were saying this before SmartTrack was a thing so the assessment is independent of feelings about John Tory.  Tory's line would almost certainly preclude any realistic funding path for that relief subway (and no, it is not a replacement for it, it would only "relieve" a small fraction of the burden on the Yonge line, and further Union station will be overcapacity by 2031 without a relief subway along King).

No, the opportunity cost is far too high and the payback is far too little.  We're already getting 90% of this from the Province anyway, and we'd have to give up 2 approved transit lines to some of our most at-need neighbourhoods most cut off from the city's rapid transit system.  This is not the best deal for Toronto, even though it might be a good deal for John Tory, Kathleen Wynne, Markham, Mississauga & Stephen Harper.

Saturday, July 26, 2014

The Forest On Chow's Bus Pledge Problems

How did we let our bus fleet get into this bad a shape and why is Chow the only "major" candidate proposing anything to fix it?

The Toronto Star has today published a piece finding problems in the feasibility of Olivia Chow's promise to improve bus service if elected Mayor.  To be specific, Chow promises to immediately improve peak hour bus service, the busiest times of day.  The Star article casts doubt on whether this is feasible, quoting a TTC official who claims there would be no additional buses available for this. 

The Election Forest: Making Buses a Priority is a Signal

A big reason I favour Chow in the Mayoral election is that she appears to be the only (major) candidate who will dedicate much attention to the bottom economic half of the city.  This is fairly unsurprising when you consider we have four conservatives running against one progressive (being fair, Soknacki has some ideas helpful to lower earners).  Buses are the biggest portion of transit time for many of the city's "left behind" areas and people, who don't tend to be very near any of the existing rapid transit lines.  This is a matter of social and economic justice.  Buses will never be the most desirable mode of transit, and we can't build LRTs or subways everywhere so of course many transit users are going to need buses for some part of their trip, but we can keep service levels high enough that when you go to get the bus, you know it will come soon, and not be jammed full when it gets there so that you can get on it.

Chow's bus promise is not the stuff of campaign consultants.  Bus service isn't sexy, we just sort of expect it to work, but under Ford (and Stintz as TTC Chair) bus service has been cut back.  The working class people and students most reliant on them now have to wait longer for their bus, and face more frequent buses too full to board.  So it is a very good thing that someone is putting this on the agenda, just as a signal that "transit is not all about who will build the most choo-choos, bus service matters"  Finding problems in the specifics of Chow's bus service plan is fine and all, it's the kind of scrutiny that should be applied to political campaigns, but at least Chow has buses in mind.

The Trees: Less There Than the Star Thinks

The Star's TTC source, Chief Service Officer Rick Leary presents a case where all the buses are already in use at peak times, and even the extra buses currently servicing under-repair streetcar lines are only available because service demand slows in the summer, but they'll be needed in the fall when school starts.  He further seems to announce a new initiative (news to me anyways) to take more buses off the road to do more preventative and less post-breakdown maintenance.  He does allow there "might" be buses available to improve off-peak service. 

I'm in no position to make expert assessment of his claims in this regard, but I do note that the Queen's Quay streetcar has been off service for considerably longer than just the summer.  Apparently the TTC had buses to serve that line prior to the end of school this year somehow.  But, turning to those actual experts, let's check in with Steve Munro, who previously (March 2014) looked at TTC surface short term service improvements:
The TTC plans to retire over 200 buses in 2014-15 (the lift-equipped Orion V and Nova RTS buses). These could provide a pool of vehicles during the two years it would take for expansion-related new bus orders to arrive.
It would have been nice if the Star has known about this, and asked Leary. As the TTC is busy getting new buses, it is strange he plans to do more preventative maintenance with a fleet of newer buses, but mainly it means there are buses that could be used for Chow's pledge.  The TTC does not generally run buses to the literal end of life of the vehicles, they just get more expensive to maintain once they pass a certain point.

(Munro also notes that progress in the York subway extension should by 2015 release some buses currently needed for "supplementary service" and that there is a major construction hiatus for the Pan Am games so no streetcar lines should be out of service.)

Ok, So There are Buses: Where to Store them?


This is a real problem, the article correctly points out the TTC has no additional storage grounds, and the planned one won't be ready before 2019 at the earliest (currently not even funded to begin, so almost certainly later than that).  Per Munro (ibid):
The TTC has already looked at leasing storage space for its fleet while awaiting the construction of Tapscott Garage, although this need was offset by the reduction of bus requirements made possible with less generous crowding standards. (Note: Munro is here referring to the Stintz/Ford era service cuts)
We are, ultimately just talking about parking lots here. Yes, I'm sure it's operationally easier for the TTC to run from dedicated storage/maintenance facilities but in a pinch, any big enough lot should do.

Ok, So There Are Places To Store Them. But Drivers?

Yes, the TTC might have to hire more drivers to implement Chow's improved service levels.  What of it?  Buses need drivers and our ever growing population will eventually necessitate more buses & drivers anyway.  Every candidate's plans to expand transit will entail hiring staff.  In the very short term I expect some additional drivers can be found by paying overtime to existing ones who would ordinarily be off shift. How long does it take to hire & train bus drivers?  Chow assigns $15M to this whole promise, which presumably includes money to hire and pay new TTC employees to drive the buses.

Off Peak Service Matters Too

All the challenges aside with finding more buses, drivers & storage for peak service, improving off-peak service matters too.  Plenty of people (like seniors) ride the bus outside of peak hours and 15 minute service instead of 30 minute service matters when you're out waiting at a stop in the middle of the day or in the evening. 

The Other Forest: Why is The TTC's Bus Fleet in Such Dire Straights?

The biggest takeaway I get from the Star's piece is that we've allowed our TTC surface fleet to get to such a terrible place where TTC management is (in effect) telling reporters during an election they simply can't improve peak service before something like 2019.  Mayor Chow or no, our population is growing and demand for buses will grow too...or maybe it will simply peak at some level of "just absolutely full" on many routes where additional commuters are forced to find other means to get around (cars) and making our gridlock problems worse.  Rather than viewing this as some big scandal in the Chow campaign, the scandal is that we let ourselves run out of breathing space on our bus fleet.  Whoever is mayor will have to grapple with this, and at least Chow is already interested in the problem.  The worst thing would be to just "muddle through" with degrading service and ever more peak capacity buses leaving people behind.  Supporters of other Mayoral candidates should ponder, what will my candidate do about this?



Wednesday, March 5, 2014

Toronto Needs Progressive Property Taxation

In November, the TTC board decided to raise fares for 2014 by approximately $60/year for people who buy metropasses every month.  Many have already noted that this amount is the same as the $60 VRT that Mayor Ford and Council repealed early in this term.  Quite plausibly, this is a regressive tax transfer from a form of taxation that falls more heavily on wealthier residents (e.g. those with cars) to one that falls more heavily on poorer residents (those reliant on the TTC).   As the TTC is already one of the least subsidized and most expensive transit systems around, it is reasonable to ask when and how a major subsidy increase for the TTC from Toronto's general revenue could ever be funded? 

Toronto is Canada's 6th largest government (by both population and government expenditure) and has no formal means of levying progressive taxation on its better off residents.  The City of Toronto Act gives Toronto a few extra taxation powers that other Ontario municipalities don't have, and yet none of these can be explicitly progressive.  In particular, the act explicitly prohibits property taxes (Toronto's top source of revenue) from being anything but flat-rate. Why should this be so?

Progressive Property Taxes

Numerous countries and municipalities which employ property taxes have already implemented mechanisms to explicitly make them progressive in nature, meaning roughly that the most expensive properties are taxes at higher rates than inexpensive properties.

Examples:
How Does It Work?

Misunderstanding of progressive taxation is quite common. In the realm of income tax, it is not difficult to find people who believe that if they get a raise that bumps their total income into a new higher tax bracket, they will end up worse off after taxes because they think their whole income gets taxed at the higher rate.  This is not how escalating bracket rates work. Only the portion of your income above the threshold is charged at the higher rate.

Let's look at Ireland's nationally set, but locally paid progressive property tax for a simple example.   Ireland charges home owners 0.18% on the value of property under 1M Euro, and 0.25% on any value above 1M Euro.  Let's imagine two homes, one worth 600,000 and the other 1.2M (twice as much).  The first will pay 600,000 x 0.18% = 1080 euros.  Simple. The second requires an extra step:

1,000,000 x 0.18% = 1800
+ plus
  200,000 x 0.25% = 500
1800 + 500 = 2300 euros.

If the second house paid 0.25% on the whole value of the house, that would be 3000 euros.  Instead, the house worth twice as much pays 2.12 times as much property tax.  That .12 is the progressive part.  No one need hold off renovating their 950,000 euro house because it will cross the magic value threshold and dramatically increase their tax burden.

Why Do It?

There is actually a good argument out there that property taxes are inherently mildly progressive (one obvious reason: wealthier people are more likely to own property and pay it), so why not make it explicitly progressive?  Particularly in an era of vastly growing inequality, some areas have done very well, but large swaths have been left trailing behind.  As the city cannot levy income taxes, a progressive property tax would be a great way to begin to address the inequality.  From "The Three Cities" (p1), this:

Toronto income change by area

Is why the politics of property tax increases are as contentious as they are. Many of the people in the brown sections are hurting.  Even if they're renters, some amount of property tax increases flow through to them, and for those who own in lower and low-middle class neighbourhoods, property tax increases hit them hard.  Many quite legitimately feel they cannot afford higher taxes, and are not just grousing, it actually materially affects their lifestyle.  It even forces some out of their homes.  Like Toronto's other mostly flat taxation powers, the problem is that flat taxes max out at the realistic ability to pay of the least affluent people subject to them.  Yet many others above that level have the means to pay more, but this can only be achieved with progressive rates.  In the past this awkward reality was "squared" by contributions from the Province, who can and does have explicitly progressive taxes, but they're proving less willing to pay their share over time.  Rather than assume trends like this below (chart refers to the TTC) will reverse themselves, Toronto should act to address its needs and not wait for the fairy godmother to re-appear.


Singapore provides an example of another advantage here, by introducing a progressive property tax structure that cut taxes on lower valued properties while increasing taxes on the high value ones. Not only can we charge more from those who most benefit from the city, but we can give those more likely to find each day a struggle a break.

A final advantage worth mentioning is that it is administratively very simple to do, since the city already has a property tax collection, assessment and enforcement system in place.  Unlike setting up fun and exciting new forms of taxation like road tolls or sales taxes, which need things like infrastructure and whole new departments of staff to run, this would only incrementally increase the work effort of the existing property tax staff.  Toronto already charges different rates for different types of property (including a regressive higher rate charged on multi-unit apartment buildings that mostly falls on low-income renters once passed along by the landlords), this is logistically very easy to do.

Problem: It's Illegal

The province would need to amend the City of Toronto Act to allow this.  They should, particularly if Toronto City Council asks them to. Toronto has an elected government, why should it not have the same capacity the Province does to decide that wealthier citizens should bear more tax burden?  Virtually every other tax in Canada is at least somewhat progressive, even the GST has rebates for low-income Canadians.  Why should municipalities not have this power?  Premier Wynne is currently searching for "revenue tools" to fund transit. Keep searching, but give Toronto increased taxation powers as a mature order of government (Ford notwithstanding) - something the province has already acknowledged in the 2006 Toronto act, which granted the city extraordinary powers that other Ontario municipalities do not have.  This is just a concession to reality: Toronto is Canada's sixth biggest government, if it cannot "handle" these powers, we'd better amend the Constitution to take these powers away from the five smallest Provinces too. 

Toronto is going to need sigificant new revenue to address its urgent and still growing needs:
  • Massive transit improvements from new lines to major maintenance deficits on the existing system
  • Upgrading our proven insufficient flood managment capacity
  • The large unfunded repair bill to maintain our social housing stock
  • Whatever we do with the Gardiner won't be cheap
  • Huge areas of economic need left behind as inequality swells will need social services & revitalization to ward off possible descent into slums
Up until now the City has basically been waiting for higher orders of government to fund these things.  A progressive property tax need not preclude that, but it would allow the city much greater flexibility to move on these items on its own, and ask the Province or Federal government to contribute to an in-progress plan which the City can lead, rather than spend months or years careening back and forth between the levels trying to work out a financing deal for any major project.  Toronto needs progressive property taxes.

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Tuesday, March 4, 2014

Yes, Rob Ford is Currently Losing

There's still some confusion about this.  Ford is the incumbent. He has as close to 100% name recognition and voter awareness as any politician can possibly attain.  Short of people who have particular mental illnesses or who purposely avoid all news, it's difficult to imagine any potential voters in the city who aren't aware of Ford and have some opinion on him.

The challengers are just that:  Challengers.  Unknown, untried.  That at least two of them (I'm assuming Chow will challenge) can already beat Ford in match ups even with multiple other vote-splitting candidates left in, is very bad news for an incumbent.

Basically, voters have already decided against Ford, they just haven't yet finalized who they want to replace him with.  That means the initiative in the campaign is all with the challengers.  It almost doesn't matter what Ford does or says.  Everyone knows him, almost nothing he does now will change many minds about him (hence desperate stunts like going on Kimmel).  But the challengers can either make or break themselves in the campaign.  If they all manage to break themselves, Ford can possibly be re-elected with some kind of plurality vote (I'm prepared to predict he cannot get a popular vote majority).  If.

This is a terrible position to be in as the incumbent. It is not hopeless, defeat is not certain, but his victory is dependent on several others failing.

Monday, March 3, 2014

Nenshi: Right About LRTs, Wrong About Ideology

Calgary's Mayor Naheed Nenshi visited Toronto last week and made some sensible comments about LRTs.  He also made some mushy and poorly reasoned comments about ideology, his ideas are popular, but fundamentally wrong and beliefs like this actually hinder progress on issues people care about.  You cannot wish away ideology.  It doesn't go out of style because it is simply how you view the world, and how you think a better world can be made.  Here's what he said:
“Here’s the thing: nobody cares about those old labels of left or right and liberal and conservative. Is removing the snow a right-wing or left-wing idea? Is fixing the potholes more New Democrat or Conservative? It’s ridiculous,” he said.
This is very unpersuasive.  It isn't hard to find libertarians who disagree with the ideas of having the state tax its citizens to provide & maintain public roads or plow those roads during winter.  Are such people a significant political force on the municipal scene?  No.  But then all Nenshi is saying that the politically potent forces agree on these particular ideological questions.  Even so, you can find plenty of left/right division in the details:  Should the workers providing these services be government employees or private contractors?  Should sidewalks be plowed?  Should homeowners be responsible for shovelling & fined if they don't? etc. 

Further, Nenshi here has (cherry) picked two quite settled matters of debate.  That the contemporary left and right mostly agree about these two things hardly means the End of History and agreement on everything else City governments might do.  Nenshi himself, who has been targetted by right wing forces in Alberta for his urban centric policies must know this.  Try asking conservatives whether public transit should be a subsidized public service or a for-profit business.  Or whether city governments should provide free or subsidized services for their residents from pools to libraries to parks, homeless shelters and sporting fields.  Ask whether urban planning should preference mass transit & higher density construction or sprawl & car-centric roads.  Ideological divisions abound once you stray from the easy matters of largely settled issues. 

The general positions that left and right take on these issues can be relatively easily derived if you understand what the division of "left" and "right" mean.  The labels themselves are arbitrary, a throwback to the French pre-revolutionary parliament.   We could call them "coke" and "pepsi" or "dogs" and "cats" - but the underlying heuristic employed by each camp does not tend to vary much across cultures or time periods.  It's not an accident that these labels have survived centuries & crossed oceans intact.  If you understand what drives the right, you can then understand why say, they want car-centric sprawl and public services minimized.  The eternal cry for "smaller government" applies just as much to municipal government as national ones.

The basic cleavage is this: The left seeks to enlarge the circle of human compassion, and the right seeks to shrink it.  There are other ways to express this, (you can state that the left seeks greater equality and the right greater hierarchy) but this basic division underlies the policies positions on specific issues taken by "liberals" and "conservatives."  This does not mean necessarily that people on the left and right think of their positions as such, in these terms (or even consciously), but the high consistency in finding these cleavages on such a disparate set of issues as handled by the modern municipality it not a mistake.

How is that Relevant to Municipal Politics?

One objection might be that municipal politics are "low-level" nuts-and-bolts issues that should not really concern people concerned with the high questions of the human condition.  But of course this is untrue.  Who needs reliable, affordable and timely public transit more than the poor?  What decides which communities the poor can afford to live in more than municipal policy?  Whether you live in a violent slum or a safe and healthy neighbourhood are largely decided by things like land zoning, provisioning of parks, and how the local schools are funded.  I'm sure some issues exist that don't easily translate into grand questions of social equality, but whatever their prevalance, municipal policy affects such questions in important ways.   

What is Ideology?

Nenshi doesn't use the word (and even mixes in partisanship by referencing political parties) but that's really what he's talking about.  It's important to spend a few words defining "ideology" - never mind whatever dictionaries say, ideology usually has a derisive meaning when used, and you frequently see people trying to dismiss someone else's ideological position in favour of their own ideological position by labelling it as such.  Typically anything that challenges universally accepted ideas is "ideology" but those universal ideas are not understood as such.  Much like "treason", ideology doth never prosper.

So what is it?  Ideology is your heuristic means for understanding how the world works.  It is a set of beliefs, both conscious and unconscious about how people behave, what is right and wrong, and what is the "good life."  Are you pre-disposed to think people are basically honest and will behave ethically with minimal supervision, or that they're dishonest and require monitoring and enforcement to behave themselves?   What do think "right" and "wrong" mean and are decided?  The Bible?  Utilitarianism?  Your ideology decides how you address these.

None of this is to say that all ideological beliefs are empirically or ethically equal.  Evidence matters (says my ideology, at least!).  Our heuristics may lead us to think that say, lowering taxes improves economic growth.  Does it actually do so?  This is an empirical question (to the extent reliable empirical tests of large numbers of people can be accomplished and accurately measured).

Nenshi is rejecting ideology.  That belief is, itself, ideological.  How do you know?  Well if my disagreeing with his ideology isn't enough, let's ask what empirical proof he can provide to prove me wrong?  Two sample consensus issues in a universe of divisive ones?

Yes, Nenshi's Statements Are Popular
“If we went on to Bay Street today and asked 100 people, ‘Are you left-wing or right-wing?’ I guarantee you, 85 of them would have no idea what we were talking about and 11 of them would answer incorrectly. And the rest would be John Tory.’” he said, to wild laughter.
This is also weak. First off it is an argumentum ad populem fallacy.  That most people might have trouble placing themselves on a left-right axis doesn't mean one doesn't exist, it just means many people don't think very much about ideology.  Why should they? 

But at a deeper level, most of those people will be relatively easy to place on such a spectrum if you actually query them on their views of various issues.  Yes, there will be iconoclasts who are difficult to place, and most people have an issue or two in which they differ from their otherwise prevailing ideology.  By and large Nenshi's 100 will divide fairly predictably.  This is an empirical result of psychologists quizzing thousands of people on moral questions and finding wide agreement on the moral issues liberals and conservatives found more important.  The ethical bases of liberals and conservatives are different in significant and persistent ways.  People may widely believe they are not ideological, but that doesn't make it true.

What's the Harm?

We should think about the harm this does.  The biggest harm is that ideology that is not understood as such is the most dangerous kind.  These are the kinds of beliefs that are the most difficult to challenge and change when evidence mounts that the belief is not working.  Those of us who admit our basic ethical systems are ideological and that those systems guide our beliefs about what even municipal governments should do, and how they do it are at least conscious of these choices.  Those who treat their ideolical beliefs as "self-evident" or "common sense" are the least apt to accept evidence to the contrary.

The other major harm is that it makes a negative out of the highly necessary process of democratic disagreement and debate.  Challenging ideology is the surest way to ensure only the best ideas win out.  Many of the worst debacles started with unanimous or overwhelming supermajority votes.  Many of the most cherished and successful government programs started in strife over vehement opposition.  I realize Nenshi did not explicitly say so, but you frequently see this kind of talk followed by calls to "move past" the old divides and "work together to get things done."  Whenever you hear someone say that, ask "get what done?  How?  Why is that thing something that should be done?"  You will quickly see ideology at work.  We cannot "work together" on common goals unless we have those goals in common!  We cannot agree on means to achieve those goals unless we share enough ideology to agree those means will achieve the agreed ends, and further that they don't have ideologically undesirable other effects which outweighs our desire to achieve that agreed goal.

An example may help bring this last, crucial point home.  Let's leave the field of road maintanance and talk about poverty reduction.  Left and right will both tell you (usually) that they agree reducing poverty is a noble goal.  Great.  But how?  The left supports policies like a minimum (or "living") wage, income support programs paid for by progressive taxation, free public education up to and including post-secondary, etc.  The right generally opposes these things, and proposes freedom, choice, deregulation, private enterprise personal responsibility and negative disincentives to poverty (e.g. that you'll starve in the dark if you don't work will incent you) to reduce it.  They may or may not support private charity intervening, funded only by voluntary donations.  To the extent they support government helping out, they want strings attached, from drug tests to "workfare."  The differences between these approaches cannot be papered over.  In fact, the differences are so vast, and the empirical results of right wing approaches so apparently counter-productive that most on the left conclude that the right's support of the basic goal is not an honest representation of its views.  That it is disingenuous.  Whatever, not going to settle this here, but the point is that you cannot wipe away these vital debates over both means and ends and get to some magical place where we all agree on what and how we should be doing.

None of the above is to say that one should consciously self-identify with the "left" or "right" and then adopt the positions of that tribe for the simple reason that they are the tribe's beliefs. That's partisanship, and a very different matter than ideology.  If that were all Nenshi meant, fine. Great. Of course it is better if people arrive at their policy positions by individual thought, and even desirable that intra-ideological debate occur.  What "liberals" believe is not a fixed and eternal quantity.  It can and should change as new evidence arrives as to the results of previous real world policy experiments.  This in fact has already happened, with the major shift of 19th century liberals away from laissez-faire capitalism and toward mixed-mode social democracy.  That liberals today believe in, say, the minimum wage, should not mean they must always believe such.  A sufficient quantity of quality evidence showing that policy is counterproductive to the underlying goals of liberalism should change the beliefs of liberals. 

If it were just Nenshi, one politician saying such things it would not be worth replying at such length, but as he himself says, such beliefs are common and receive applause when expressed.  No one wants to be one of those silly ideologues who are closed minded and unreasonable.  Except the aversion to recognizing your own ideology as such is about as ideological as it gets.  I would infinitely prefer an honest debate between ideologues to one in which some are pretending to be above ideology, claimants to the one, true, pure nature of the world.