news TTC Endorses Fare Hike, Decides to Outsource Cleaning Services

Opening salvo in the 2013 budget debate: if the City isn't willing to spend more money, riders will have to.

If TTC commissioners have their way we’ll be paying a bit more to ride the rocket next year: yesterday they endorsed in principle a five-cent fare hike. They also—in the face of much shouting by TTC workers, who came out in force to observe the meeting—decided to outsource some cleaning services to a private contractor, another element of the overall 2013 budget strategy.

TTC CEO Andy Byford laid that strategy out early on in the meeting, giving us a good sense of how the TTC budget debate will shape up over the coming months.



In his presentation, Byford said the TTC budget was primarily influenced by four key elements:

Ridership levels.

Every TTC budget includes a projection for the number of riders who will take transit in the coming year. The TTC is projecting some ridership growth, based on expected growth in Toronto’s economy, employment, and overall population.



Service levels.

In order to maintain current service levels for the projected larger ridership, the TTC will need to spend more money. With more riders, vehicles would get more crowded and move more slowly. Therefore, to maintain the current wait times and crowding levels on the current number of routes, the TTC is going to need to put more vehicles on the road and pay more drivers to operate them. Byford has decided, as his starting position, to create a budget that maintains current service levels.



Costs.

The TTC budget presented yesterday includes several cost-containment measures, the most controversial of which is outsourcing some cleaning services. There are also some costs the TTC cannot control, for in addition to inflation, labour costs go up every year. (The arbitrated agreement with unionized workers—a result of city council’s and the province’s decision to make the TTC an essential service—calls for a 2 per cent wage increase. The TTC also decided to give a corresponding 2 per cent increase to non-union staff and to managers.)



Operating subsidy.

Every year the TTC collects money from fares, and also generates revenue via things like advertising, but this does not cover all the costs of operating the system. In order to make up the difference, City Hall also puts money towards TTC operations. This is not a situation that is unique to the TTC: it is true of every public transit system. In 2011, the TTC got 70 per cent of its operating budget from revenue. This is remarkably (some say scarily) high: according to data provided by the TTC, in New York that figure is 57 per cent, in Boston it is 38 per cent, and in Chicago it is 44 per cent. Which is to say: in every other major North American city, the transit system relies substantially less on fares and substantially more on taxes than in Toronto.



Councillors will decide how much money to give the TTC when they debate the overall budget over the coming months, but a while ago Rob Ford told every agency, board, commission, and City department to assume that their budget would be flatlined—that they would get the same in 2013 as they did in 2012. Byford made his second major choice by going along with that. He could have tried to rebel by offering a budget that said “we need additional funds from the City”—as, for instance, the police did last year. He decided not to.

In effect, Byford’s strategy is to present city council with the following proposition: if you want to keep service levels the same, and if you don’t want to give us any more money, given that we’re already looking for every possible efficiency, the TTC is going to need to get the money from riders.

By explicitly linking the elements of the budget together in this way, Byford is publicly putting the onus on city council to decide what it really wants. If the most important goal, as the mayor directed, is not to give the TTC any more money, councillors will need to bite the bullet (and face potential voter ire) and accept a fare hike. If council is uncomfortable with the fare hike but still doesn’t want to cough up any more cash, the consequence will be diminished service. And the reason those are the choices council is faced with is because the TTC is making a demonstrable effort to curb costs by taking on politically controversial and potentially disruptive things like outsourcing. (Bob Kinnear, who heads up the transit workers union, called TTC management’s budget numbers “bullshit” and said the TTC board was “declaring war” on its own front line workers.)

At least, that’s the argument. Whether council will buy it is yet to be seen.

The most likely political scenario as the broader budget debate unfolds is that councillors allied with the mayor will dispute the claim that the TTC is as efficient as possible, and councillors on the left will reject a fare hike and call for a greater operating subsidy. At this point, given the public’s overall level of frustration with the quality of transit in the city, it’s doubtful that anyone will go out on a limb and suggest more service cuts—the mayor and his allies tried that during the last budget, and were squelched by a centre-left coalition of councillors. Whether another coalition will form, perhaps reluctantly, and support Byford and the TTC board’s attempt at balancing all these elements as a compromise, is so far unclear.

The TTC’s proposed operating budget isn’t balanced yet—it is $10 million short. Byford said after the meeting that TTC staff are still figuring out how to make up that difference. The fare increase is projected to bring in $18 million; should council reject it, that will add to the budget gap that has yet to close.