Constrained
^This is photo of a city councillor balancing the budget.
Municipal governments in Ontario are an essential and fundamental service provider. They work behind the scenes to make almost every daily necessity a reality. Without municipalities, some of what we take for granted, like waste disposal and access to green spaces, wouldn’t be possible. Despite not being constitutionally recognized, I’d say municipalities are an integral component to what we know and love about Canada.
However, despite playing such a critical function, I learned that municipalities are largely constrained.
Did you know that municipal governments must balance the budget? This means that the money spent must equal to the money raised. It’s not an option for the city of Toronto, for example, to run a deficit. The budget is divided into two parts: the operating budget and the capital budget. The operating costs are those associated with annual expenditures on services and/or programs, such as paying TTC operators. These costs cannot include borrowing of any kind. The capital costs, on the other hand, are long-term expenditures of physical assets, such as repairing decaying infrastructure. Municipalities can borrow money for a capital cost. In other words, they can go into debt if they need to purchase another bus, but they cant go into debt to make sure the City’s landscaper is paid.
That leads me to my next point: if the budget must be balanced, how do municipal governments pull that off? How does city council decide what services get what? With very few revenue streams, balancing the budget can be an extremely difficult task.
Throughout various debates I’ve had over the past few years with a friend of mine who is a Toronto Police Officer, we discussed the topic of defunding the police. Their take was that the Toronto Police Services need an even larger budget, as the force’s mandate is expanding. This sentiment is shared by the Toronto Police Services Board as they have requested a budget of $1,969,800 this year, which is a 2.0% increase from the 2021 budget.
If the Police get a bigger piece of the pie, who’s gets smaller?
This was my biggest takeaway from last week: since municipalities must balance the budget, at what expense can portions of the budget grow? And if residents don’t want to pay more in property taxes, then how can we really afford or justify an expansion in one portion of the budget over another?
Further, what policy instruments can municipal policy makers leverage to address competing interests? Or, are there innovative policy solutions capable of addressing budgetary debates at the municipal level? Surely, there must be some formula to this… right?
