Slack advocates for fiscal sustainability of cities

head shot of Enid Slack
Dr. Enid Slack

UTTRI associated faculty Dr. Enid Slack, Director of the Institute on Municipal Finance and Governance (IMFG) was quoted in “Cities face massive financial shortfalls because of COVID. How can they cope when they can’t run deficits?” Globe and Mail, April 13, 2020.

Municipalities across Canada are predicting budget shortfalls due to COVID-19 shutdowns. Among other decreases in revenues, transportation-related revenue losses are significant.

Toronto is projecting a loss of about $47-million in parking fees over just 12 weeks, through the end of June, and is losing more than $20-million in transit fares each week.

While revenues are down, the cost of essential services such as transit continue. Cities are not legally allowed to run deficits. Dr. Slack comments that borrowing from other levels of government may not be the solution:

If they start borrowing for operating [expenses], where does that end?” she said. “They will have to pay this money back and, you know, will they be able to? There’s really issues around fiscal sustainability. – Dr. Enid Slack

Sources of revenue for municipalities are extremely limited. Dr. Slack says it may be time for a change:

Ms. Slack, with the Institute of Municipal Finance and Governance, thinks a long-term effect of the current crisis is that governments should take a hard look at which level provides, and pays for, services.

For decades cities have assumed ever-larger responsibilities. They’ve faced more demand for transit or they’ve had to take on social services downloaded to them from above. But they receive only a small percentage of what is paid in taxes.

Read the article “Cities face massive financial shortfalls because of COVID. How can they cope when they can’t run deficits?Globe and Mail, April 13, 2020

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