Political Analyst and Observer, Bill Longworth's, Weekly "Eye on City Hall" Columns, as published in Oshawa, Ontario, Canada's Oshawa Central Newspaper

Monday, January 17, 2011

Oshawa's Annual Turkey Strut
Tax Setting Mating Dance

“Eye on City Hall”

A column of Information, Analysis, Comment, and unfiltered opinion
reprinted from Oshawa Central Newspaper

Bill Longworth, City Hall Reporter
January 17, 2011

Well it’s city budget time and the annual mating dance ritual, “The Strut of the Turkeys” between bureaucrats and politicians has begun.

It follows a predictable time worn pattern and the steps along the way are craftily designed to make you ecstatic in accepting your yearly tax increase.

Tax cuts, sold by the politicians, will usually come with some sleight of hand magic that will make you thankful for the city revenue cuts in some well publicized areas while taxes and user fees and service cuts are introduced in a myriad of other areas to more than make up for the well publicized cuts.

The real test of tax cuts is to see bottom line cuts in operating revenues of the city and real cuts to bottom line government expenditures. We must see a total reduction of monies taken in by city hall, not simply a rebalancing of tax sources with the net revenues remaining the same. We need governments to operate with more efficiency at less cost, the same goal as every profitable business worldwide.

I have written in past columns that when politicians approve incremental percentage tax increases, which is the usual case, the effect is to pad any past fat, waste, and inefficiencies that had crept into the administration over the years. The only way to cut such fat, waste, and inefficiencies is to incrementally cut departmental budgets.

The Annual “Strut of the Turkeys” budget process for governments at all levels is always the same and follows the following well defined processes.
1. Politicians call for a tax cut, hold, or small increase

2. Bureaucrats raise alarms about the disasters to occur as a result of anything less than the inflated X% increases they’ve requested and outline an exaggerated or inflated list of outrageous and alarming service cuts required to meet the demands of the politicians.

3. All of the cuts bureaucrats outline as required to meet political demands are those that have the highest public profile and political impact.

4. As a result, the politicians get cold feet at the alarms raised by the bureaucrats and they moderate their demands about the cuts, holds, or small increases, and give the bureaucrats the moderate increases they really wanted in the first place. In the process, bureaucrats make imperceptible adjustments to meet the reduced allocations with no discernable difference to the public. It’s like selling a used car---ask high so there’s room to negotiate down to the price you wanted in the first place.
In Oshawa, all those elected called for tax cuts or a tax freeze since this was the number one taxpayer concern.

Politician’s push for tax cuts is offset by a bureaucratic push for bigger budgets and all of the power is with the bureaucrats. If knowledge is power, bureaucrats have all the knowledge of their operations and by selectively providing or withholding information, mislead politicians about the true state of affairs. The combination of information denial and the provision of falsified information by bureaucrats underlie the annual cat and mouse budgeting process which defines bureaucrat’s reluctance to be dragged away from their gold plated lattés.

Part of the lies, of course, are the expensive expert "consultant's reports" written by consultants who agree to write what the city wants them to write in order to get politicians to "buy into" decisions favoured and already made by the bureaucrats.

All in all, politicians have no idea what is happening on the micro level in city hall and have to rely on senior officials for all information....and by selectively providing and withholding pertinent information, bureaucrats can effectively manage political decision making.

I recall a statement from a Director of Education who was asked to recount his frustrations at his Board of Trustees spending inordinate amounts of time discussing unimportant issues. "Frustrated? Hell no," he said, "If they waste all their time talking about those issues, they'll never get around to discussing the important stuff." What the Director implied with those words, of course, was his encouragement (and leadership) to keep non-vital issues in front of the Board so he was free to run the Education System without political interference. And of course Oshawa City Officials operate in the same way.

This is where we need strong political leadership to impose the council will despite the bureaucratic protests. Unfortunately, based on weak political leadership and inexperienced politicians, the present city council doesn’t seem to have the strength or will to grab control.

As policy setters, strong politicians can set policy for bureaucrats to implement and insure that it is followed. In terms of budgets and the resultant taxation levels, politicians can only approve tax cuts or increases and major expenditures. As a “show,” some politicians will suggest some cuts to simply show they are on top of the issue.

I’d like to point out examples of the “Strut of the Turkeys” budget deliberations by our present council to point out how the four principles of the Turkey Strut works in Oshawa but this is an impossible task, since nothing has been happening here on anything.

Hell, City Politicians haven't even figured out yet how to replace the disgraced Mike Nicholson who reneged on accepting his council seat after wnning the election because he found out he couldn't hold any elected office as a TTC bus driver. Good thing he isn't getting a chance to help run the "sometime complicated" issues confronting city business if he didn't know and understand that.

Because of the devoid of Oshawa City Council activity, I will have to look to Toronto examples which exist under the strong leadership of Mayor Rob Ford, who, in contrast to our new Oshawa Mayor, actually defined a platform during the election that people voted to accept. Winning on a defined platform, of course, gives the Toronto Mayor legitimacy in taking action to implement his platform. John Henry, in not having an election platform except for a few platitudes like “restoring trust,” “improving transparency and accountability,” and, “respect for the people” has had no real plan of action endorsed by the people.

In Step one of Toronto’s Annual ”Turkey Strut”, Mayor Ford called for funding cuts of 5% for all Toronto City departments and asked that all Departmental Budgets be produced reflecting that cut.

In Step two of the Toronto’s ”Turkey Strut”, Police Chief Bill Blair blared, “That’s impossible! We’ll have to cut 1200 police jobs!” he announced to a citizenry already concerned with crime and public safety even though Toronto crime rates have been decreasing for the last decade according to statistics. The poker faced chief knows he has to bluff when he only has a pair of deuces in his hand.

In response to questions of studies of required staffing numbers, he confirmed there’d been no staffing studies, and further that Toronto’s policing levels shouldn’t be compared to other Canadian Municipalities which don’t have Toronto’s problems but rather with similar sized Chicago which has twice the officers per capita and where every citizen has a constitutional right to carry a revolver in their pocket or purse.

Sure chief, Toronto, with its 59 homicides last year, should be compared to Chicago with its 458 in 2009. Right on Chief! Brilliant!

And by the way Chief, Canada is one of the safest countries in the world and Toronto is the safest city in North America---but hey Chief, in the turkey trot, you're expected to gobble up as much tax cash as you can to grow your department....whether you need the staff or not. It's the bureaucratic way!

In any case, Blair came out of a meeting with the Mayor beaming about a 2% increase to his budget during these times with a 12 month inflation rate of 1.9965%.

I guess the chief will not have to cut any fat, waste, or inefficiencies out of his department!

Toronto’s Library Board also defied the Mayor’s call for a 5% cut by asking for a 2.6% increase stating Ford’s cuts would mean reducing book purchases by 18,400 books and the closing of the City Hall Library Branch. Cutting books from the library’s $171M budget and closing the downtown city hall branch hits as close to the heart as possible without rendering the library system clinically dead and implies they are running a remarkably skimpy "no fat" system.

The Toronto Civic Administration also avoided a last minute 10¢ TTC fare increase by coming up with a magical $16M and the transit commission with another $8M to make up the $24M the fare increase would have raised. Now I wonder whether this magically found $16M came out of the fat and waste that was built into the city budget through the use of incremental tax increases which pad all built up fat and waste yearly by the incremental increase applying to every aspect of the budget including fat and waste. Even city officials have not been able to report where the extra $16 mill came from....Guess it's tough for them to say, "It's just part of the fat!" It is clear though that the $8M the TTC is expected to save does come from their padded fat and waste.

In any case, Politicians neither have the time, education, expertise, or knowledge of the many specialized functions within city hall to micromanage. The only effective thing they can do is cut funding which the city manager in turn would direct all his subordinate managers to do.

It’s only the Department Managers, who know where the fat and wastage is within their departments, but heretofore Public service bureaucrats have only been interested in growing the size of their departments since bottom line profitability or efficiency never enters the equation.

That is an aspect of government budget setting that has to change as we drag the bureaucrats kicking and screaming from their gold plated latté cups.

Toronto Mayor, Rob Ford, campaigned on the theme, "Stop the Gravy Train." With the points made above, Ford’s idea is meaningless unless he can demonstrate that he is extracting reduced revenues from the public and reducing the costs of government.

Announcing major tax cuts like the $60M auto registration tax is meaningless if the equivalent $60M is then extracted from the public by increasing user fees or saving the money through reducing staff and services.

The only way for Ford to stop the gravy train is to cut departmental budgets with the directive that there are no service cuts and no user fee increases.

Cutting costs by cutting service and staffing is easy and is what made then famous "Chainsaw" Jack Welch, former GE CEO a darling of the investment world. He forgot about improving profitability by increasing efficiencies, productivity, customer service, and new products and markets. Those keys to profitability are worshipped by the best CEO's just as improving efficiency and service should be hallmarks of excellent public administration.

Ford knows this, and it is only with reduced Toronto city overall expenditures without service cuts that Ford can demonstrate that he is bringing increased efficiency and productivity to civic administration by cutting out fat and waste.

The tax revolt in underway everywhere in North America and the people are demanding nothing less.

Be sure to follow Bill’s radio broadcasts, “Eye on City Hall”,
every Monday, 6-9 pm EST, on http://www.ocentral.com/thewave/

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