Tweet

return

Paper for "Commitment to Community" on strategies for ensuring funding for poverty reduction initiatives.

I wrote this for the "commitment to community" group which is run by the social planning council to try to pressure the city government for more social spending. Especially, for more funding for the social agencies which make up social planning council. They did not get far with the city budget process ths year.

I also 'tabled' this at the social planning AGM the next day and it did not get much "take up" there either. I will send it around to some of the groups which make up planning council or have been lobbying the city for more social spending.

What I have proposed, essentially, is that they have to demand a large increase in city revenues if they are going to get anywhere at all. This should not be a really hard sell because anyone with any brains can see that this is exactly what must happen.

Intro

I have been watching this group for awhile. What you are doing is getting you nowhere. You do not correctly understand the situation you are working within, nor do you know what your ultimate goal is.

The city government can do nothing to reduce poverty. The provincial government can do little. Ending poverty is within the power of the federal government with its control of monetary and macro economic policy.

Local government can relieve the worst effects of poverty. It can also provide citizen's organizations with the basic resources with which to promote real poverty abolishing measures to the federal government. That is all local government can do.

But to do that local government needs to have sufficient fiscal resources. Right now is the worst time to ask the city of Toronto for more spending. It is faced with a fiscal crunch due to inadequate revenues.

The revenue problem is the result of the disastrous "amalgamation" of Toronto twenty years ago, which must be undone. It is not the purpose of this paper to go into the details of the problems of Toronto governance. Yet ultimately this must be dealt with by removing the city from further destructive interference from the province and establishing a more democratic internal governance form.

Lack of democracy allows a privileged class to control local government and block increases in revenue which are critical to enabling the city to carry out its functions. The property tax in particular is grossly unfair and must be reformed. Renters pay three times the property tax of home owners.

The home owners pay far too little tax, even compared with other municipalities around Toronto. They are getting a free ride at the expense of the lower income people, and to an extent, from the residents of the surrounding municipalities. Yet the wealthier home owners are a minority in Toronto.

The key is for people to begin demanding more direct democracy from the city government. This means, more public decisions made by referendum. This is a step toward more participatory democracy. A democracy that is both direct and participatory is called a deliberative democracy. The public deliberates and decides, and commands government to carry out.

solution

A first step to democratic development in Toronto is to demand referendums on key issues, and since the revenue crisis is the biggest problem facing the city right now, a referendum is needed in order to resolve the issues within the budget crisis. This should be the strategy of the Commitment To Community group and the social planning council, and other allies it can draw into the campaign.

Nothing else is likely to break the fiscal deadlock in the city. The austerians have the ability to stop any tax increase in council, no matter how justified. The decision must be taken away from council. A referendum must be demanded to break the deadlock, mandating a reform to the property tax system in the city.

The reform would have three main features. It must insure that enough funds are raised to meet the cities needs, in line with other municipalities in the Greater Toronto Area. It must correct the extremely unjust, three to one, imbalance between renters and owners in the city, and the injustice to lower income people generally. And it must put budget power in the hands of citizen councils, in line with participatory budgeting principles in other municipalities.

In future budgets must be set, not according to how much the cities budget can be squeezed down, but on how much the residents of the city, as a whole, can afford to pay. The city must seek to maximize its fiscal capacity because there will never be enough money to do all that could be done. There is a huge capital backlog at present.

Rather than being set up to increase as the land is more intensively used, the property tax should be set to decline as it is made the best use of. This will greatly facilitate planning. But best of all it will allow relief for people who genuinely cannot afford higher taxes, such as the retired and disabled, and the unemployed.

Allocation of revenues must be put under the control of local budgeting councils, according to the Porto Allegre model. This also facilitates the decentralization of the city government which is urgently needed.

strategy

All labor and social agencies in the city with an interest in stable city spending have thus an interest in supporting such an initiative. The provincial government and the other GTA municipalities also have an interest in ending the endless headache caused by the austerian foolishness of the Toronto council. Most of the Toronto electorate would vote for such an initiative as most would pay less taxes and have better services.

A powerful coalition could be developed around this idea. It requires some leadership skill on the part of its organizers. If it were developed from active citizens and front line social workers, it would be free from the objection that it is one level of government intruding on the jurisdiction of other governments, or a special interest group seeking special advantage for a few.

It will take enormous work and resources to bring this off, but nothing else is going to be effective. Do the people now working with C2C want to go on being ignored year after year, perhaps to make themselves feel better for having made some token effort? Or, do they believe in themselves enough to do the job which needs to be done?