The National Post’s Natalie Alcoba:
Transit officials are bracing for the city to cut its annual subsidy by 10% next year, widening its budget gap to more than $80-million. And that’s without factoring in a new labour contract with workers that will add millions more, given that every 1% wage increase adds $10-million to the TTC’s bottom line.
That new labour contract is likely to provide a higher-than-normal wage increase due to City Council’s recent decision to designate the TTC an Essential Service.
The only way to significantly reduce the overall cost of the TTC is to lower service standards to the point where riders opt out of using the system. Thanks to aggressive strategies by the previous administration to expand service, TTC ridership has been rising every year. As such, costs go up every year.
Needless to say, a 2012 budget that saw reduced service and a fare increase could set off a chain reaction ridership decline. As more routes lose riders, they can justifiably be cut in future budgets under the guise of efficiency. The net effect would be budgetary savings for the city, but the overall economic impact of transit riders moving to other modes of transportation (driving, most likely) would be very bad for the city.
Related: An OpenFile, John Michael McGrath makes the case for road tolls in a very good piece.