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Any worries we might have had that Toronto Council's annual dance with its finances was going to be a staid and uninteresting affair were handily dispelled this past week. It may be true that the usual political tango with the province wrapped up early enough that the city's budget is fundamentally balanced.

But with the revelation that hockey leagues and other sports organizations would have to pay another 21.5 per cent in fees to maintain that balance, it became clear to everyone that debate over the coming weeks will not be wanting for controversy.

Which is not to say that councillors will spend from now until the end of March arguing about hockey permits; that debate properly ended this week, when Mayor David Miller waded into the kerfuffle and pronounced 21.5 per cent too high.

The controversy isn't over hockey. It's over something more fundamental: the credibility of the city's leadership both political and administrative.

That credibility is something that Miller and the team of councillors who support him dearly need to cement this year, following last year's tumultuous battle over the imposition of the land transfer and vehicle registration taxes. And the launch of the city's $8.2 billion operating budget nearly two weeks ago was a clear attempt to regain it.

The budget this year, Miller and his budget chief Shelly Carroll said, was balanced out of the gate - thanks to a co-operative provincial government and those two new taxes. Their early-morning launch touted all sorts of enhancements - cleaner right-of-ways, tarted-up subway stations, and even a new stingray exhibit at the Toronto Zoo.

There was no mention that the budget balanced so well in part because Toronto was going to be raising permit fees; indeed, city officials and politicians like Ward 21 (St. Paul's) Councillor Joe Mihevc went to great, hand-waving effort to convince the press and public that no such fee hikes were being contemplated.

To be fair to Mihevc and the rest, those fee increases were available to everyone who cared to read through the detailed operating budget documents, and had one of us in the press corps turned to that page in the hours and days following the launch, we would have found it.

And given the public relations disaster that followed its eventual release, it's hard to ascribe particularly sinister motives to anyone at the city on this - a less effective containment strategy would be hard to imagine.

However, the whole disaster does point out that the good-times budget process that seemed to be unfurling the morning of Jan. 28 is anything but.

As pointed out last week, as matters stand, this turning-point budget maintains a wobbly balance by completely depleting social service reserves, adding significant new taxes and hiking some fees past the point of affordability. It has maintained its appearance of true balance mainly by a rigorous application of political spin and an adherence to truthfulness that can most charitably described as lawyerly.

As Miller and Carroll have both pointed out, it's early in the process and the financial problems in the 2008 budget are relatively small - the city can, if nothing else, likely eliminate the fee increases by dipping into the "unanticipated" assessment growth from the previous year that always comes in at the 11th hour to balance the books.

But it's also early enough in the process that this week has set the tone. It will take more than fancy footwork to change that by the end of March.