Okay, let's be very clear. The Canadian Taxpayers Federation likes tax cuts. Yours truly likes tax cuts. Heck, I suspect that even my cat likes tax cuts. There, we've got that on the record.

Which brings us to Mayor Chiarelli's challenge to the city's senior management team. Specifically, Mayor Bob told staff to go find money to reduce property taxes by 10% for, hold on, this year's tax bills! Many city hall watchers along with taxpayers were taken aback by this announcement.

Just a few short months ago the Mayor told us that the sky was falling and that Ottawa's future was in jeopardy during the transition funding spat with the province.

So what gives? Well, to be fair to the Mayor, Queen's Park has told Ottawa to use its savings from amalgamation to fund its long (and growing) list of infrastructure needs. From interchanges to convention centres to suburban arenas in Kanata and Orleans, the apparent tens of millions in savings from amalgamation should be reinvested back into the community, according to the Premier.

But the Mayor has countered by saying that amalgamation savings were supposed to lower taxes. And on this point, he has a point. On August 23rd, 1993, on December 6th, 1999 and again on January 26th, 2000, the Ministry of Municipal Affairs and Housing put out news releases pointing to "fewer politicians" and "lower taxes" as results that would accrue to Ottawans as a result of amalgamation.

The argument from the FOB (Friends or Fans of Bob) spin-doctors is clear. Tax cuts were supposed to be the by-product of amalgamation, so the Mayor intends to do just that. Besides, they say, isn't it better to build this in now instead of risking a lower or no tax cut as the spending-inclined councillors are sure to ratchet up the pressure for big-ticket items as they play "ward boss, bring home the bacon" politics in future budgets leading up to the 2004 municipal election? It makes for a compelling argument.

But the devil, with any plan, is in the details. To start, the city has basically closed the books already on Budget 2001 on both the operating and capital sides. Why wasn't this tax cut idea floated during the budget deliberations? Could it be because council - for the last five months - was sidetracked with trivial smoking, bilingualism and hiking their own office budgets issues?

So it is a touch problematic to go back now and find an estimated $20 million in tax savings. And the initial indications from staff point to a plan to raid the tax stabilization fund and/or city reserves to make the tax cut a reality.

This violates rule number one of public or private sector accounting: Don't raid capital to fund operating expenses. Raiding reserves is a one-time fix for savings that must be built into the base budget for pass through to ratepayers, year after year after year … etc. Allow me to reiterate, I like tax cuts, but they must be sustainable. If staff can find $20 million in pure operating efficiencies by the June 19th deadline, more power to them and the Mayor to make this tax cut happen.

However, tomorrow, the city's planning and development committee will receive a report from the Centre for Spatial Economics (how's that for a cool forecasting title?) showing that Ottawa's population could reach the one million mark anywhere between 2008 and 2012. The needs of this growth (read: programs and program spending) must be taken into account by city officials as they struggle to meet the Mayor's tax cut challenge.

As well, we are less than four weeks away from the much ballyhooed "growth summit" where new visions of development, public transit and sustainable community growth will be discussed and debated. Some of these ideas (which will no doubt mean big capital bucks commitments) will find their way into the still to be developed Official Plan. All to say, that this city has significant infrastructure and program challenges, not to mention, harmonized union agreements (with their inherent upward cost pressures) in the short-, medium- and long-term to contend with.

Tax cuts are welcome. But they must be sustainable year over year over year. There's no sense cutting residential property taxes by 10% this year and then dramatically raising them in a few years. If you think this is fear mongering, look at what happened recently in Toronto with their budget woes. The Mayor is playing a dangerous game of tax savings chicken with the province.

Until all the numbers and details are put on the table, yours truly will remain more than a little skeptical. Right now this tax cut idea is more about politics than policy. But I'm willing to be proven wrong … after all, my cat likes tax cuts too.