What's behind Miller's sudden budget surplus?
Besides the fact that he played coy with the media and the public by sending out a vague and cryptic media advisory, the Mayor's announcement of a $100 million surplus was surprising, but not shocking. With the increase in revenue from the Vehicle Registration Tax, the Land Transfer Tax, water rate increase, garbage tax, and other user fee increases, it is easy to see how the "surplus" could take place. I still find it surprising that the Mayor uses the word "surplus" to describe a budget that includes a tax increase. A true surplus means no tax increase in my books.
The Mayor will definitely have some explaining to do as to how the budget process created this surplus "out of the blue," when just a couple of months ago the budget hole was more than $500 million. Critics will definitely claim that the Mayor hid the surplus until it was politically opportunistic to use it.
Okay, enough of my cynicism, while the surplus was a surprise, the proposed allocation of that surplus was miraculous!
Instead of using the surplus to go on a spending spree, the Mayor has suggested using 25% of the money to reduce the residential property tax rate to 2.9% and the rest of the money to create a reserve fund to be used to offset the pressure for next year's budget process.
Wow! Where did this Mayor come from??
I think I have the answer...
One word: Legacy!
With this announcement, Miller has attempted to selflessly prepare the City and the new Mayor for the budget challenges that lie ahead. He has also created an opportunity for the left on Council to shift to the centre in order to be re-elected this year. With this new budget direction, the councillors and mayoral candidates on the left will be able to knock on doors during the campaign and show that they do have a prudent approach to governance and they aren't the spendaholics that the right has been successful at framing them as.
You have to hand it to the left on Council. When the chips are down, they do what ever it takes to remain in control, including becoming Conservatives.
This sudden epiphany will definitely cause tension on the left. The special interests groups will be raving mad about this announcement over the coming days and weeks. Who knows, Council may reverse this decision and spend away the 2011 reserve fund.
For the sake of the future of the City, I certainly hope that they maintain this direction, but as we all know, anything is possible at City Hall.