TTC Adjusts 2009 Budget For Slightly Harder Times

At the recent TTC Board meeting, staff presented an update on 2008 ridership and on projections for 2009.

This review began with a look back to the recession of the early 1990s when the system lost 90-million rides from 1990 to 1996, a full 40-million of them in one year, 1991.  That year saw a combination of falling employment (6.3%), a fare increase (7.3%), service cuts (7.4%) and a 7-day strike.

Before I continue, one important point about service cuts.  The TTC always talks about vehicle mileage, but they mix subway together with surface operations, and the subway acts as a buffer in the statistics.  Most of the cuts actually come on the surface, but the real impact is masked in the totals.

For 2009, the TTC is taking a much different approach.  Although employment may fall, the TTC is not expecting this to be a major factor.  No fare increase is contemplated, and service is actually expanding, not contracting.  Labour unrest is unlikely.  A telling comment in the presentation says just about everything that needs saying about transit “budgeting” in the 1990s.

Lesson learned in terms of forecasting ridership:  Employment, fare increases/subsidy level and service are all interrelated in terms of ridership impacts.  Treatment of one element cannot be considered in isolation or results can be disastrous in terms of significant ridership declines.

Tell that to past Chief General Managers, Commissioners, Councillors and Premiers.  One might think that it did not take us until late 2008 to understand this basic fact of transit planning.

Meanwhile, the TTC has removed the “economic growth” factor in its ridership estimates for 2009.  Riding is now projected to grow from 467-million (probable actual for 2008) to 473-million, with revenue growing from $837-million to $851-million.

The increase for 2009 comprises various factors:

  • 3-million for riding growth due to expanded service
  • 2-million for the absence of a strike
  • 2-million for savings in fraud on adult tickets
  • 1-million from expansion of the U-Pass program

Less:

  • 1-million from riding lost through charges for parking lots
  • 1-million due to calendar adjustment

The real question will be what will happen if the economic impact on riding is greater than expected.  How will discretionary trips by locals and riding brought by tourists be affected?  There is some padding available in the service budget with provisions such as the next round of Ridership Growth Strategy rollout (the 20-minute maximum headway).  If push comes to shove, this could be deferred, just as RGS has been pushed back so many times in the past.

One thought on “TTC Adjusts 2009 Budget For Slightly Harder Times

  1. What is this “calendar adjustment”?

    Steve: There are only 365 days in 2009 as compared with 366 in 2008, and the “lost day” is a weekday. Also, in 2009, Boxing Day falls on a Saturday rather than a Friday. This sort of thing is included in every budget. Note that the numbers are rounded to the nearest million, and it’s not reasonable to expect an estimate at a much better level of accuracy.

    Indeed, an increase of six million might almost be considered within the margin of error overall, and yet by yearend, everyone frets when the numbers don’t come in bang on budget because the TTC is not allowed to carry over small adjustments into the new year.

    Like

Comments are closed.