Orchestrating failure: Taxpayers on the hook again

For Immediate Release
16 December 2008

Orchestrating failure: Taxpayers on the hook again

London City Council has once again demonstrated its antipathy to any notion of fiscal restraint or responsibility by making London taxpayers guarantors for a $500,000 loan to Orchestra London.

The parallels to the proposed bailout package for the “Big Three” automakers are alarming. Like the “Big Three,” Orchestra London has a huge debt load, no commitment to restructuring, and a product that does not resonate with consumers. And like a bailout package for the “Big Three,” the money provided by taxpayers will only allow Orchestra London to survive long enough to ask for yet another bailout.

Without a serious commitment to immediate restructuring, there is no reason to think that Orchestra London will solve their financial difficulties. City Council has failed to even place the most elementary conditions on Orchestra London for receipt of a loan guarantee, allowing Orchestra London to continue its dysfunctional ways at taxpayer expense without penalty.

The Forest City Institute also joins with those Councilors and commentators who note that this act also undermines the ability of Council to take necessary steps to restrain spending during these hard economic times. If Orchestra London is eligible to receive money with all their known problems, then why should anyone else be turned down?

The Forest City Institute would like to suggest that Council turn away from handing out band-aids to failing organizations and take effective steps to deal with the root causes of London’s economic difficulties. We note that the median income of Londoners is already $10,000 per year lower than 30 similar Canadian cities owing to high levels of government spending and taxation. As a result, potential patrons have a reduced pool of resources to support Orchestra London or other artistic endeavors.

Looking at solutions that are within our power to quickly implement, we note that selling London Hydro, using the estimated $250 million proceeds to pay down 2/3 of London’s outstanding $370 million debt and slashing our interest payments by 2/3, would allow for a 3% tax cut for Londoners. A tax cut would power new investment, new economic activity and new jobs for the City of London, making us a safe haven in these hard economic times.

And who knows? The newly empowered people of London will have new-found wealth to support artistic endeavors like Orchestra London after all.

Contact:

Forest City Institute
PO Box 39071
London, ON N5Y 5L1
Phone 519.438.8606
www.forestcityinstitute.ca