Ridership projections for the TTC continue to climb with the year-end total now projected at 499-million, up 2-million from an estimate only one month ago. The TTC’s “surplus” (actually a decrease in the projected subsidy level from the original budget) is also growing thanks to higher fare revenue and cuts in projected spending for the remainder of 2011.
The details are included in the Chief General Manager’s report covering the system’s operation up to the end of October 2011, but with year-end projections based on more recent experience.
With discussions of the TTC’s 2012 budget still swirling at City Hall, the update to projected 2011 figures raises questions about just how much money the TTC actually needs to balance its books and how much service will actually be required in the new year.
Comparing 2011 projections as they appear in the current report and in the November 23 version, we can see where the year-end estimates have changed.
Revenue from fares is projected at $3.4m more than in the November estimate. Although there will be 2m more rides, some of the increase reflects travel by passholders that contributes no marginal revenue.
Overall ridership is running at 4.9% over 2010, almost 2% higher than the commonly used 3% rate in many projections.
On the expense side of the ledger, some projected costs have fallen. The saving from “gapping” (leaving vacant positions open longer than planned in the budget) is up by $0.7m, and other reductions will save $1.8m. The one-time cost of Corporate Restructuring (downsizing ) is now estimated at $3.0m less than expected. This gives a total reduction in expenses of $5.5m compared to the November estimate.
The combined effect is that the projected “surplus” is now about $9m greater than the November estimate. Whether this has been included in the City’s budget projection of the overall corporate surplus is unclear given that these number have only just been published. (Of course, this is not a true “surplus”, but an underspending against the original budget. However, some of the budgeted “revenue” comes from reserves, and underspending reduces the draw from that source leaving more money in the pot for future years.)
Looking at any financial statements, it is important to distinguish between one-time costs and the ongoing expenses of an organization. Because only the variations to budget are reported, we can only see the budget lines where these occur, but it’s worth noting that if the net effect of one-time items is eliminated, the surplus would be about $7m higher. Some of these items are non-cash bookkeeping entries that cancel each other out, but the cost of downsizing TTC staff is a real cost that applies only to 2011.
The proposed 2012 budget includes a 10-cent fare increase to adult tokens and to senior/student tickets with roughly proportional changes to other types of fare (see page 11 of the linked report). TTC staff have been asked by the City’s Budget Committee to report on an option for a 15-cent fare increase that would generate enough additional revenue to reverse the proposed January 2012 service cuts. This analysis will likely appear before the TTC Commission meets on December 14, and I will update this post when the report is available.
Based on recent strength in ridership, the TTC now projects that 2012 riding may reach 507-million rather than the originally estimated 503m. This pushes the revenue estimate for 2012 by $5m. However, if the actual 2012 results come in at 499m, even at 507m the 2012 ridership would only be up by 1.6% showing the combined effect of demand growth and riding lost to the fare increase and service cuts. If service is retained at the current loading standards and if the fare increase has no effect on riding (as happened when the TTC raised fares by 25-cents in 2010), then ridership could grow by 3% or more taking us to at least 514m in 2012.
This has major implications for service planning next year and beyond. TTC staff project that at the 507m level, $1-2m worth of additional service will be required in September 2012.
Multi-year projections in the budget report are already falling behind likely ridership levels. Without a fare increase (or equivalently with no drop-off in demand caused by higher fares), the TTC projects 2013 ridership at 515m or only 3.2% above the projected 2011 total. To 2015, the projection is 536m or 7.4% above 2011. If the presumed effect of higher fares is included, the 2015 figure is even lower at 523m. These are very conservative estimates, and all of them include the effect of service standards cuts that may not actually take effect.
If ridership were to grow at 3% compounded from 2012 through 2015, the TTC would reach about 562m rides in four years’ time. That’s a lot of additional riding and service, and it would be borne by the existing system as no rapid transit expansion is planned until mid 2015 at the earliest (the Spadina extension).
Although the TTC does provide pro-forma budget estimates for 2013-15, these are based on conservative assumptions and do not provide a broader view of the decisions and options facing the transit system in coming years. Whether such a discussion would be welcomed at City Hall is anybody’s guess — more spending on transit is probably the last thing the right wing of Council and the Mayor want to hear about. However, this puts calls for much improved subsidies both from the City and Queen’s Park in the spotlight.
Anyone who may call for higher subsidies really needs to understand where transit in Toronto could be headed. If we ask for more money based on too-conservative estimates, we will be right back at a point where funding seems inadequate, never catching up to actual demand. Even worse, if that funding is used primarily to flat-line fares, the crunch on service will tighten and transit will be even more inconvenient relative to driving.
Debates about the future of transit cannot be put off indefinitely with the claim that we can’t afford to improve the system (except for the odd multi-billion dollar subway scheme). The pressure for more capacity in our transportation network won’t vanish simply through political rhetoric.
TTC budget debates continue to focus on one-year views, on shuffling a few millions here and there on a table where billions are at stake, on scoring political points against competing views of what transit should be. That’s no way to serve the riders, the citizens of Toronto.
Steve Munro 
Lots else here could be discussed.
But in looking at a longer-term fare plan….
I was curious and compared fares for our suburban counterparts, and some other larger systems.
The TTC seems to more heavily penalize the adult discretionary rider, while offering unusually generous ‘concession’ fares, particularly for ‘child’ fares.
This is most notable at the ‘cash’ level, where many systems offer discounts in line with the TTC’s for students/seniors, but a full cash fare is required.
Can we reasonably construe that we could, without adversely impacting ridership, move to one cash fare for all rider groups. As as moderate the level of concession for the ‘child’ fare; and raise much of the needed revenue for operations?
This is not to suggest that subsidies ought not to be greater, but rather a question of whether certain TTC concession fares are out-of-line with normative practise; and whether, in conjunction with appropriate subsidies, ‘normalizing’ these fare levels might provide for much needed service improvement.
Steve: Children’s fares represent a very small part of TTC revenue, and they have been historically much lower than adult fares for a century. Do you really want to contribute to the current debate that we are balancing the budget on the backs of children (and their parents)? There are major issues with TTC service and funding, and these will not be fixed with a one-time bump in a small portion of the fare revenue.
LikeLike
According to a report in today’s daily RailwayAge news update, so is transit ridership up in the US:
It is interesting that the biggest gains were in light rail and the smallest on buses, but there are many bus routes in the US that run every hour from 6:00 a.m. to 7:00 p.m. with no Sunday or holiday service. Trolley buses are above the average but there are not many systems and they tend to be in high use areas.
James says:
Here are Brampton’s current prices but I believe that they are going up in the new year. What is interesting is that the senior cash fare is $1.00 but senior tickets are 10 for $15.00 and the presto fare is also $1.50?
Mississauga fares in the new year for adults will be:
Toronto’s fares are comparable, especially when you consider the level of service.
Brampton’s ridership increase last year was 12%, mainly due to increased service and the express ZUM service. Cutting service is counter productive because it will increase auto use and slow down the precious private auto. Perhaps the Ford brothers will get stuck in monster traffic jams.
LikeLike
Warning: rant that’s only tangentially related to the article :).
I know this isn’t a particularly original observation, but it’s unbelievable to me how backwards the thinking of the right wing of city council is on this issue. Gridlock is almost certainly the most pressing issue for the city right now, and the only real solution is to invest heavily (and intelligently) in transit.
Transit shouldn’t be a partisan issue — everyone in the city, whether they use it or not, stands to benefit from improving it. The fact that the “war on cars” is still accepted rhetoric; the fact that anyone thought it was okay to force a 10% TTC cut while ridership grows, the system strains, and gridlock reaches a breaking point; and the fact that the mayor unilaterally cancelled the fully-funded Transit City plan and replaced it with a unicorn and an expensive, totally unnecessary LRT burial reflects badly not only on our politicians, but also the citizens who elected them without understanding the issues.
If our politicians and citizens can’t agree that expanding the system and improving the (laughably bad) riding experience is a priority, what will we be able to agree on? Anybody taking an objective look at the situation should realize that we’ve chronically under-spent on the system, and that if we don’t make long-term, well-planned, real-money investments soon (if we’re not already too late), gridlock is going to get completely out of control.
And perhaps more importantly, citizens and politicians need to understand that this won’t be cheap, and that there’s no magic bullet. I don’t think this administration has any interest in having an adult, magical thinking-free conversation about transit (or really, anything), but I think there’s a real opening for a mayoral candidate in 2014 to say “look, nobody wants to pay more taxes, but would you rather have marginally lower property taxes or be stuck in gridlock and packed like sardines into crumbling transit infrastructure?” Throwing up our hands and saying “if only the province would pay their fair share” is no longer something we can afford to do. As Ford says, there’s only one taxpayer. I don’t care which level of government is going to pay for better service.
I ride the Bloor-Danforth line and live and work within minutes of subway stations (and live at the intersection of three streetcar routes) so I’m in perhaps the most ideal possible transit scenario, and even my ridership experience is terrible. If there’s even a short delay or a train goes out of service, I’ll watch multiple trains go by, and end up packed in near a door and getting out onto the platform at every stop to let others out. If this is the best the system has to offer, I weep for those on busy bus routes like Finch and Dufferin facing cuts.
Listening to Karen Stintz and other Ford cronies tell me that the service is unsustainably good and that we need to pay more for less service while they give tax breaks to drivers is almost farcical, and comes off as rearranging the deck chairs on the Titanic.
LikeLike
Is the gas tax that goes to the city part of the city’s subsidy to the TTC, or does it come directly from the province? Does that even show up as a provincial subsidy or is it hidden as being the city’s generosity?
I also noticed that the TTC has to pay taxes and licenses, is that paid to the province? What other fees or taxes does the TTC have to pay to other governments?
Steve: The province gives the city roughly $160m in gas tax revenue. This was originally supposed to be all for capital, but the city directs about $90m to the TTC’s operating subsidy with the rest going to capital. For some reason (usually related to whatever argument is being made, and by whom), this provincial contribution is mentioned or omitted as it suits the speaker. Having said that, the province gave the TTC more in operating subsidy 20 years ago than the $90m they get today. Out of a $1.5-billion budget, $90, does not go very far. A contribution on a comparable level to the old formula would be $250m.
Toronto also gets $150m from federal gas tax, and all of this goes to capital.
The correct breakdown shows up in the TTC’s annual financial statements where the various sources of revenue are detailed in the footnotes.
Yes, the TTC pays taxes and licences to both the city and to Queen’s Park. On the HST, there is a partial rebate, but this affects the capital side more than operations where labour is the biggest component of costs.
LikeLike
According to a report in today’s daily RailwayAge news update, so is transit ridership up in the US:
If 52 million passengers is a 2% increase then the total US public transit ridership is about 2.6 billion. The TTC’s will be about 0.5 billion or just under 20% of the total US ridership. This is a frightening comment on public transit in the US.
LikeLike
With Adult fares and passes up 4%, and Child tickets up 9%, it certainly does give the impression that the city is waging a war on children!
Children tickets are sold in sheets of 10. Instead of raising the price by 9% from $5.50 to $6.00 they could just have easily increased them 4.5% to $5.75 and printed 57.5 cents as the price on each ticket. As the tickets are [not] sold individually, there’s no reason they have to come to an even 5-cent increment. In Montreal for years they sold these tickets in books of 12, which results in some very odd prices on the tickets!
PS. Looked in my wallet – TTC doesn’t even print the price on children’s tickets!
LikeLike
After checking sources on the internet I have come up with the following figures for the GTHA services compared to the total US APTA service which includes commuter rail.
LikeLike
@Robert Wightman
I may be mistaken, but are you comparing the quarterly figures from the U.S. to the annual figures for Toronto et al? I know transit is bad in some places in the U.S., but I would think the big cities in the Northeast like Boston, NYC, Philly and D.C., not to mention the West Coast or Chicago, would more than make up for it.
LikeLike
Andrew is correct. Here are the figures with all expanded to 1 year. The GTHA still has just under 7% of the total US rider ship. My apologies. Most of the GTHA figures are for 2010 while the US is for Q3 2011.
LikeLike
I don’t see how Durham can have more riders than Hamilton, Burlington, Oakville, and Mississauga put together. Maybe that should be 5 million for Durham and not 50 milliion? (And even five million sounds like a lot.)
LikeLike