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TTC warns of fare increase, service cuts

Transit must have subsidies to survive, TTC chairman Howard Moscoe says

Municipal Affairs Reporter; With a report from Colin Freeze
Tuesday, April 18, 2000

If city council adopts its budget committee’s proposal for TTC funding this year, it will set the stage for fare increases or service cuts next year, TTC officials warned yesterday.

Adoption of the budget proposal would give the transit service less money than it received last year and force the Toronto Transit Commission staff to recommend service cuts and a fare increase in 2001, TTC executive general secretary Vince Rodo said.

“This year’s subsidy cut is next year’s fare increase,” TTC vice- chairman Rob Davis said.

The council will consider its 2000 budget next week, and TTC officials decided at a meeting yesterday to make a last-minute effort to keep the transit operating subsidy unchanged from last year.

The budget advisory commission decided last week that the TTC’s operating subsidy this year should be $144.3-million, $5.6- million less than the $148.9-million it got last year.

While this would give the TTC enough money to get through this year without a fare increase or service cuts, the TTC fears that that council is unlikely to increase subsidies for 2001.

If that happens, the TTC will fall about $10-million short of the money it needs in 2001, unless it raises fares or cuts service, Mr. Rodo said.

Passengers on subways and streetcars warned yesterday that neither option was very palatable, though some said they would be able to swallow a small increase.

“I think we’re all used to a little bit of an increase anyways, so it’s no big deal,” said Suzie Jakowek, a mother who takes transit six times daily and spends about $85 monthly on a pass. “It’s better than waiting longer.”

Natasha Bell said that other forms of inflation had led her to abandon her car: “Gas prices are high, parking is high. That’s why I’m on the TTC… . With inflation, it’s acceptable. Five cents, 10 cents is acceptable — but, a buck, I’d freak out.”

However, 18-year-old Eman Aboelsaud hopped onto a TTC streetcar after performing in an Earth week play at Nathan Phillips Square, and warned that any increase is a disincentive to ride.

“I believe that people should be encouraged to ride the TTC,” she said.

“It’s a great way for preventing pollution, and raising the fares scares people, obviously. It just means more cars on the road, more pollution and traffic congestion.”

The fight between the TTC and the city dates back to last year’s budget, when the TTC was instructed by council to raise fares to meet rising costs. At the same time, the council asked the budget committee to prepare a three-year funding plan for the TTC, and instructed the city treasurer to stabilize its financing by putting the TTC’s operating surplus into a reserve that would pay for future losses.

A three-year budget plan was never brought forward or approved by council. Tom Jakobek, who chairs the budget committee, said that “you can’t come up with a three-year funding plan.”

He also said that the instruction that the TTC keep its surpluses was a last-minute motion during last year’s budget debate that flies in the face of the rules for the rest of the city.

“The reality is that no other agency, board or commission keeps their surplus,” he said.

But TTC staff say they followed council’s direction when preparing the budget plan, which assumes that the agency will have an annual $149-million a year subsidy for the 1999-2001 period, a subsidy level that produces surpluses in 1999 and 2000.

TTC chairman Howard Moscoe said that the agency cannot afford a cut to its base budget.

“It creates a problem for future years. What happens to the base budget determines what happens to the TTC for next 10 or 15 years.”

He likened the proposed cut in the subsidy from council to earlier cuts by the province, which has now withdrawn from subsidizing either the TTC’s operating deficit, should one occur, or its capital budget.

“We can’t sustain a system without some kind of public subsidies.”