No sooner does the TTC publish a report with the detailed list of changes, it also published a preview of the 2016 budget process in which we learn:
Submissions for the 2016 Budgets are due to the City in June. This is a very tight timeline and staff are currently preparing these budgets in accordance with the City submission requirements and in consideration of the following:
- A City requirement for a 2% efficiency reduction in the net Operating budget (approximately $10-$11 million for TTC and $2 million for Wheel-Trans).
- [Many other items which can be read in the report]
There are two small problems here:
Council has never passed any direction that agencies reduce their budgets (which in the TTC’s case means its subsidy requirement). The TTC will require at least $100-million more to operate the system in 2016. This must come from subsidy, fares or some combination of the two. Mayor Tory seems happy to use the TTC as a backdrop for self-promotion even though budget and service decisions actually rest with the TTC Board and with Council, but is careful not to mention that the TTC could actually face a funding cut in 2016.
A related problem faced by both the Mayor and the TTC is the city’s cap on borrowing which is linked to tax revenues. Debt service must not exceed 15% of the taxes (which account for only about 1/3 of the total city budget), and all of the borrowing room is spoken for out into the early 2020s. Part of Tory’s reversal earlier this year included the recognition that the TTC needs more buses. Who is paying for them? The riders through the farebox, not a capital subsidy from the City or Queen’s Park.
Part of the cost for new buses will show up in 2016 and will be funded, under current plans, from fares again. However, there is a limit to the amount of capital spending that can be sustained from the farebox considering that the TTC’s annual capital budget (excluding special projects such as subway extensions) run to $1-billion or so, roughly the same as all of the fare revenue.
The costs shown for many items above are partial year costs. For example, the service improvements that will come into play in September will only operate for 4 months in 2015, but for 12 months in 2016 and beyond. Money to pay for full year service has to come from somewhere.
The sad and outrageous truth is that Mayor Tory is happy to bask in the warmth of publicity for better transit service, but his budgetary goals work in utterly the opposite direction.
In August 2014, CEO Andy Byford produced a report listing all of the possibilities for improving the TTC together with their cost. For his troubles, he was the subject of vitriol from, among others, the Tory camp who felt the TTC was endorsing Olivia Chow’s transit platform. Almost all of the recommendations subsequently became TTC and Tory policy.
The TTC Board should insist that Byford produce budget options that don’t acquiesce meekly and implement the Tory cut, but actively show what could be achieved if only the TTC had better funding. That’s what the TTC Board and its Chair are supposed to do, not simply to provide a photo op every time John Tory wants publicity.