or How I Learned To Stop Worrying and Love the Tax
Posted on – 11/5/2005
On Wednesday October 26, I attended a public meeting concerning the .5% income tax increase on the Toronto city ballot. Unfortunately, very few other citizens felt the need to attend. In attendance were members of the city police force, some firemen, a handful of council members, the council president elect, the mayor’s wife, representatives of the joint ambulance EMS organization, the city auditor, the city’s legal adviser, a few other city officials, and about three other common Joes besides myself. As a result, I pretty much monopolized the meeting.
I began by reminding those present that I had recently tried to revive the youth harbor concept as a not-for-profit corporate entity. I then noted several previous and since efforts by other individuals to “give the kids something to do.” I noted the Red-&-White Corner, The Castle, and the Galaxy all tried as for-profit businesses. I pointed out several other church based attempts. The point I was making was that there was nothing in the proposed budget about giving the kids something to do, but the proposal I had seen indicated that $15,000 would be set aside for “Senior Citizens.”
Now, I have no particular animus for senior citizens, but I wanted to know a little more about this expenditure.
I was informed that the money is doled out to two separate groups of organized geriatrics. One is the Sunrise Seniors and the other is (I believe) called simply Toronto Seniors. There is no over-site on these funds. The groups receive equal shares, and they spend it at their absolute discretion. Currently, they receive $2,500 each.
I was also informed that the $15,000 on the proposal was not “carved in stone.” The proposal was simply written up to give the public an “idea” of where the revenues might go. I noted that I was aware of this, and that had I thought it was carved in stone I wouldn’t be there and I would be voting No. For the record, I am voting yes, and encourage my readers to do the same, but still I feel that some public input on how the money should be spent is not inappropriate. I said as much, and nobody present disagreed with that.
But back to the senior groups. As best I can surmise, these two organizations are made up of roughly 100 individuals. These organizations have access to the Roosevelt Center, but are not responsible for maintenance on the building (which is currently in need of roof repairs.) How they spend the money no one could say. (As I noted already, it is spent at their discretion.) I am told by two separate sources (both of whom claim to know their information first hand) two conflicting accounts. Both agree that a portion of the funds are spent hiring buses to take the membership of these cliques to Atlantic City and Mountaineer, however one insists that this is only a small portion of how the money is spent while the other insists that this accounts for the lion’s share. To my thinking, this is irrelevant. What it means is that your and my tax dollars (however much) are being spent to ship people on fixed incomes to spend their pension checks out of the municipality.
Now, far be it for me to deny retired people the right to gamble away their social security, but I shouldn’t be expected to happily subsidize it. The only reason I was given for why this money was being given to these groups was that each was promised $10,000 a year roughly ten years ago so long as the funds were available, and the amount has shrunk each year since due to other demands on the money. This $15k was in the proposal to bring them back to that original $20,000 level. Nobody, however, could tell me why this promise was made in the first place (although I believe it was to encourage them to lobby for the tax increases.)
Now, I’m not saying that there is anything wrong with any of this. I just don’t think it is in our best interest to continue with this program in its current state. It was suggested that I come up with an alternative solution to the problem. I believe that I have just such an idea, and I intend to outline it soon.
First, however, a necessary digression.
At the time that that proposal was written, the current budget had not been compiled. This tax will potentially increase the amount of revenue from income tax by $300,000 per year at current levels of personal income. The current 1.5% tax raises roughly $900,000 per year for the city. However, the current budget has a $90,000 shortfall. If the tax fails, the city would have a $90k hole in their budget unless cuts were made from the previous year’s expense sheet. On the other hand, if the tax passes, the city can maintain the current expenses but $90 thou would come from the new tax revenues dropping the available funds for that worksheet to approximately $210,000. It is unlikely that there would be $15,000 available for Seniors. But there would be something, so I’m going to assume $10,000.
Here is what I propose. Rather than giving the seniors that money up front, continue giving them only the $5000 they currently share. Place the other $10k into a form of interest bearing escrow account. The stipulation on the money would be as follows.
‘ This money is set aside to be used at the end of the five year life of this income tax increase regardless of whether the tax is renewed or not.
‘ The intended recipient of this money is a joint committee of the two senior groups named above provided that both groups are still in existence at that time. Otherwise, whatever group still exists would comprise the committee.
‘ To receive these funds, said committee must provide Council with a proposal that meets the following conditions.
A – The money will be used to build or rebuild or maintain a structure within city limits designed to be utilized as a “Senior Center” open to all city residents or non-resident members of said groups 65 or older.
B – The money will only be given if the groups have also arranged for matching grants so that the amount in question is matched by at least 75%.
C – Capital to maintain and staff the facility as necessary will also have been arranged for by said committee for a period of not less than five years following the conclusion of the current tax.
‘ Failure to meet these requirements will result in the money in said escrow account (including all interest) to be returned to the city’s general fund.
‘ Council is NOT required to place the same amount into the account each year of the current tax as unforeseen expenses may mean that the funds are not available in a given year.
The beauty of this plan is that it puts the onus to plan for a senior center on the people who will benefit from it. It also frees up the Roosevelt Center to be utilized as a youth center, and it potentially provides a windfall for the city at the expiration of the current tax should the senior groups be unable to fulfill their responsibilities under the terms of the plan.
Understand, the city is under no legal obligation to make ANY funds available to senior groups, and I am not even suggesting that they renege on their original promise to fund their day-trips (and whatever else.) I’m simply suggesting what I think to be a fair and equitable solution to what is currently an obviously inequitable burden on the city.
By the way, I have one other little suggestion which is the brainchild of my good friend Mike.
The city should place $400 into a savings account at 8% interest for twenty years. In 2025, they’ll be glad they did. Had they done so in 1985, the city would now have $1 million to play with.