This week, the TTC presented a 2009 Operating Budget in a style departing from past practice. Instead of weeping and wailing about how they would love to run better service, but can’t afford it, the TTC now has a budget posture of “this is what we plan to run, now let’s find the money to do it”.
This is the sort of advocacy long missing from a “transit” agency.
The starting point for the budget assumes:
- Costs will rise due to inflationary and contract pressures, as well as operation of more service.
- Revenues will rise due to increased riding (with no allowance for a fare increase).
- The City of Toronto subsidy will remain unchanged (this is actually a decline taking inflation into account)
- The outstanding difference is to be funded through whatever revenue streams become available including a carry-over of any surplus from 2008 (at last report, a deficit, not a surplus was forecast).
Riding at current levels was last seen almost two decades ago in 1990, just before a recession triggered job losses, funding and service cutbacks. During the dark years, service improvements were hard to achieve because almost no changes could meet the high average cost recovery of the existing system. Policy shifts in this decade have moved the TTC to actively seek new riders even if this means that average will fall from its high of 85% back to a range in line with historic practice of the 80s and before.
Parts of the cost base rose faster than inflation and this ate up some of the headroom that might otherwise have been available for service. However, these increases were mostly absorbed by the system without service cuts to preserve the momentum of ridership growth.
Ridership in 2009 is expected to be up to 480-million, or 3.4% above the 2008 budget and probable yearend. But for the walkout earlier this year, 2008 riding would have been above the budget. The year-to-year comparison is complicated by the fact that 2008 included a weekend-long strike, while 2009 is not a leap year and therefore has one less day’s worth of riding.
Service hours will increase in 2009 by 9% both through planned improvements in 2009 and the full year impact of changes implemented part way through 2008. These changes include operation of all routes on the same hours as the subway system (some of these have been implemented, but most will come later in 2008), and reduction of the maximum headway to 20 minutes (targetted for late 2009). Another 2008 change carried forward is the reduction in maximum average load standards triggering better service on crowded routes. (Service kilometres go up by only 6% indicating that added hours go disproportionately to heavy, slower routes.)
The budget shortfall of $87-million must be addressed somehow, but to put this in perspective, the report shows the requirements out to 2013 with a subsidy shortfall rising to $322-million. This does not include allowances for the net additional cost of new rapid transit operations whatever flavour they may take, nor does it provide for any fare increases. The TTC will now prepare a multi-year plan for ridership, service, fares and the financial strategy(ies) that will be needed to sustain the system’s operation. Such a plan is definitely needed in the context of regional fare and service integration.
The possibility remains that our economic situation will lead to yet another one-year fix with a bit more money from various governments and a fare increase. If this happens and the service initiatives stay in place, that will be a good first step. If better service falls victim to budget cuts, then all the fine political words about reducing congestion and environmental impacts by making transit more attractive will be so much hot air.
The real test of governments is not how much they spend when times are good, but how well they support key services when times are bad. The TTC set the bar high by saying “this is what we should be doing”. Now let’s see who is going to pay for it.