As theatre the drama now playing at City Hall merits a below average rating. Even by the standards of 100 Queen Street West, the hysteria over the new taxes is over-the-top. The key players have all settled into predictable messages. But in this excitement there is an opportunity to develop some principles for better governance. Let’s hope that Council doesn’t lose sight of the underlying reasons for the current financial position. With any luck we won’t have a repeat performance next year.

Stripped of hyperbole, Council’s recent decision to defer implementation of new taxes has little immediate impact. The City’s financial requirement was for 2008, and the Provincial Government still needed to approve implemention. The deferral allows for both the Provincial election to pass, and for Budget Committee to consider balancing old and new taxes against savings and levels of service. Quiet negotiations between the Premier’s and Mayor’s offices can still continue. The deferral even gives the administration time to whip a solid majority of votes. All these steps sound routine.

So why the hysteria? One reason is that Council has been establishing new programs and projects for 2008 at a rate well above 2007 spending levels. It needs the money from the new taxes. Let’s take a look at some approvals from just two meetings before the summer recess: $42m for a Energy Conservation Fund, $9m for a Green Energy Fund, $9m for expansion of the Deep Water Cooling project, $13m for energy efficiency upgrades at City Hall, $54m for new garbage bins, and so on. Not included are opportunity costs on such decisions as renewing the Casa Loma contract for twenty years, and paying probably too much for affordable housing on Richmond Street.

These are all worthy projects. Some can be creatively financed, or put into capital budgets. But they are all new. Does Council need to recommend them all? Now?

Without new sources of revenue, there is no chance that these projects can be funded without impacts elsewhere. And that’s the issue. Instead of funding just a few enhancements through modest tax increases, the administration has avoided any discussion of priorities by maximizing the new tax revenues. Even in its frustration at being denied those new taxes, the administration will not seriously debate priorites. The public is presented with only one choice: accept the new taxes or Council will cut old programs.

It doesn’t need to be this way. One of the easiest steps to reduce tension is simply not to approve new programs unless there is a real revenue source. Since existing levels of service are managable with modest levels of the new taxes, Council could focus the discussion on new projects against new taxes. It is neither fair nor helpful to cut services based on maximizing distress.

Instead of working through a program that would minimize increases and provide lower levels of enhanced services, we are presented with apocalypse. Transit Commissioners, who have stonewalled Budget Committees for years, immediately suggested closing an entire subway. Never seriously recommending bus route reductions during budget negotiations, they now present route closures throughout the City. The Public Library Board, which in my memory has rarely complied with budget targets, similarly announced cuts at branches beginning at the start of the school year. One gets the impression that these reductions are presented more for pain than for a willingness to offer savings to preserve other City programs.

So what happens from here? My guess is that we will have a loud summer. I expect that there will be modest bidding for support from Toronto voters during the Provincial election campaign. I also expect the administration will return a little chastened, hopefully with a carefully planned use for the new taxes. Most importantly, it will make sure of its majority.

In the end, all sides will claim victory. But unless the administration uses Council to solidly fund its good intentions, the stage will be set for a rerun next year.