Toronto Mayor Rob Ford’s claim to have saved a billion dollars is a key pitch in his comeback campaign. Since scandal overtook him last month, he has argued that whatever people say about his personal behaviour, he remains a steadfast champion of the taxpayer. As he told a business audience at Casa Loma last week: “The Ford administration has saved more than one billion dollars.”
But, under scrutiny, that claim has begun to crumble. When he laid out the arithmetic behind the claim this summer, he included a $24-million increase in user fees for city programs. He also threw in $78-million from contracting out garbage collection in parts of the city, even though the saving comes through the life of a seven-year contract that still has years to run.
Most important for reaching the $1-billion, he included $200-million from the decision early in his mayoralty to cancel the vehicle-registration tax. That was a saving to the driving taxpayer, but it cost the city treasury money. It was not a budget cut; it was a tax cut.
The distinction is basic. If ordinary householders talk about saving money, they mean spending less, not reducing their income. But even after journalists started pointing out Mr. Ford’s faulty logic, he stuck with his billion-dollar claim. He insisted that his figures were correct and said that city finance officials backed him up – which, in briefings with reporters, they did.
That is why what happened on Monday was significant. The billion-dollar claim came up at a meeting of Toronto City Council’s budget committee held to present the proposed city budget for 2014.
Mr. Ford told the committee that the proposal revealed an attempt to let loose the “gravy train” that began when city council reduced his powers last week. Then his brother, Councillor Doug Ford, vice-chair of the committee, took his turn to speak.
He addressed his questions to the city’s two most senior finance officials: chief financial officer Rob Rossini and city manager Joe Pennachetti.
“Can you confirm once and for all that this administration, under your brave leadership, and the mayor’s, has saved the taxpayers 800 million plus – and I know you don’t like including this – plus the 240 car-registration tax, which equals one billion forty.” (He was using a slightly higher figure for the car tax.)
His voice rising, he demanded: “For once and for all, tell the media back there that twist the stories that we have saved over 800-million plus the 240-million.”
Addressing his remarks to the chair, as is customary, Mr. Rossini replied: “Through you Mr. Chair, yes.”
But when Councillor Ford turned his gaze on Mr. Pennachetti – “Do you confirm that, Mr. City Manager?” – the city’s top official gave a somewhat different reply.
“I confirm … budget savings of 774, thereabouts, so almost 800-million, and I agree with your comment that the 200 for the [vehicle-registration tax] really is something separate but, yes, the savings are around 800-million.”
Councillor Ford pounced on that. “Thank you. Did the media hear that? Everyone’s confirmed? Thank you. So we all know – 800 plus the 240 million – thank you, so that’s a billion, forty million.”
Addressing the television cameras a few minutes later, he urged voters to re-elect “a responsible government that saved over a billion dollars for them.”
That, of course, was misleading. Given a chance to endorse the billion-dollar figure, the city manager in fact confirmed that at least $200-million of what the Fords call a saving was not a budget cut but something else. It was a tax cut. There is a difference, and the Fords could afford to admit it.
The Ford administration can claim some genuine fiscal successes, including reaching a tough new deal with city unions and ending the practice of using leftover money from one year’s budget to plug holes in the next.
Mr. Pennacchetti argues that big progress has been made in recent budgets. Although not all the money listed even in the $800-million figure can be categorized, strictly speaking, as spending cuts, the city has managed to achieve many millions in savings during Mayor Ford’s time – just not $1-billion worth.