Tolls just the first step for fiscal gap
Mayor John Tory has boldly gone where no other mayor has gone before. He is recommending that Toronto place road tolls on the Gardiner Expressway and the Don Valley Parkway, the only two expressways the city controls.
And, yet, the Toronto mayor has wimped out on the matter of fixing Toronto’s fiscal gap.
As politics go, Tory’s stance is understandable and can be explained away by those who care about his electability. This is as far as the mayor can go, they’ll say. And he may have gone too far in backing what has been a perennially vexing and controversial measure.
But, in truth, Tory hasn’t gone far enough.
The mayor looked at a list of staff recommendations to permanently fix the city’s fiscal woes in 2017, 2018 and beyond; and he gagged. Instead of adopting the full approach — a broad sweep of taxes and fees that are absolutely essential to the city’s economic future — Tory cherry-picked and settled with road tolls.
For a $2 toll, the city could net $200 million a year. Tory also supports a hotel tax and another tax adjustment that together add a total of $42 million a year. It seems like a lot of money until you hear the cost of rehabilitating the Gardiner Expressway just went up by $1 billion over the original estimate of $2.6 billion. So the proposed toll is mostly gobbled up by repairs to the roadway alone.
Where is the money to close the half billion dollar gap in the 2017 operating budget?
Where is the money to finance the $33-billion shortfall in capital projects — essential rehab, rebuild, replace and new infrastructure already approved by city council, but unfunded?
Staff recommended property tax increases, more land transfer tax, return of the vehicle registration tax, parking levy and the like. There is also the possibility of selling off Toronto Hydro. In essence, a little bit of everything is needed to close Toronto’s budget hole. A comprehensive, sustainable approach suggests nothing can be ruled out.
Tory has dodged the big discussion. And without the leadership of the mayor’s office, it is almost impossible for city council to wrestle this monster of a decision in a comprehensive way. Therefore, road tolls will dominate the discussion and the other revenue tools will be punted down the road some more.
On the surface, Tory’s embrace of road tolls — as opposed to the other revenue tools — is a strange choice.
There are few measures so visible — and so persistently and daily annoying — than the toll booth. (Or the monthly statement from electronic tolling à la 407 ETR.) But there is method to the madness, one surmises.
Tory has been pilloried in the past for taking a principled stance — he campaigned for premier of Ontario on a platform of extending full funding to parochial schools to match what Catholic schools enjoy — so he should know he will be criticized vigorously. Already, Tory’s approval rating has dipped as a result. It’s likely someone will challenge him in the 2018 municipal election and use opposition to road tolls as the primary plank in the campaign. So why tackle the vote-killing policy? Because the mayor has little choice. He needs the revenues. Other revenue sources pale in comparison. Alternates come with their own poison pill of constituency disapproval. He has a chance of cobbling city council approval for the measure because he should get the support of council’s NDP and progressive faction. And, if all else fails, he can turn it over to the people in a referendum in 2018.
There is also this: Property tax hikes and a return to the vilified vehicle registration tax would hit city residents only, the very voter who will be passing judgment on Tory in two years. But an estimated 40 per cent of road toll revenues would come from drivers who live outside the city borders. They would be forced to pay without having a voting say.
It’s distressing that Tory has chosen to play up that angle in press appearances last week, and he seems to do it with relish. Drivers from outside Toronto feel attacked and have responded with vitriol.
Wouldn’t it be better to make the argument that Toronto and its neighbours share a symbiotic relationship, based on mutual benefits? It only makes sense that everyone share the cost of the DVP and Gardiner, two major arteries essential to the vitality of the region.
Tory’s hard sell likely flows from polling data that tells his advisers that the argument has resonance with Toronto voters. It takes the bite out of the bad news. Toronto voters might not like the idea of paying the toll, but they feel better knowing that those outside the city will help pick up the tab.
There will be many obstacles to overcome between now and implementation, optimistically in 2019, but more likely much later. The provincial government must approve it. There will be provincial and city elections before this goes ahead.
In all the uproar that is bound to flow from this idea, remember this is the first, most basic and benign of steps the city needs to start addressing its fiscal gap.
Choke on road tolls and Toronto will asphyxiate. Royson James usually appears Saturday.