Back to transit - the TTC cost spiral

It's been a few months since I wrote much about transit. What is there really to write - nothing much changes at the TTC. However, since we're about to get socked with a mammoth property tax increase in one form or another - you all might be interested in a big reason behind the increase.

(The proposed Land Transfer Tax is a property tax - you just pay it all at once when you are selling/buying.)

A while back I analysed the comparative performance of the Montreal transit system (MTC or STM depending on the language) and the TTC. I've put together some updated figures:

Montreal - MTC/STM

Operating cost per rider
1994 actual: $1.63
2007 budget: $1.88

That's a 15.4% increase overall - but a decline of 2.9% when inflation is taken into account. This means that the Montreal system lowered its unit operating costs - even when the increased cost of fuel and electricty are taken into account.

Toronto - TTC

Operating cost per rider
1994 actual: $1.73
2007 budget: $2.35

This is an overall increase of 35.8%!!!!! OR 20.4 percentage points higher than Montreal.

What does this mean in real $$$. Well, if the TTC had matched the STM's performance, it's 2007 operating cost per rider would be:

1.154 *$ 1.73 = $1.995 / rider

or $2.35 - $1.995 = $0.355 lower than the actual budget.

@ the 2007 projected ridership of 461 million

461 million * $0 .355 = $163.7 million

In other words, the TTC has missed and is missing opportunities to become more efficient while the STM hasn't and isn't.

The Montreal system's performance shows that you can have a succesful transit system without an ever upward spiral in costs.

The worst for the TTC is yet to come.

The 2008 TTC pro forma budget that is referenced here shows that the TTC costs will explode next year. Operating expenses are set to grow by $128 million ($1,083 million ==> $1,211 million) while ridership revenue will grow by only $24 million. (This was before the recent fare increase was voted in.) This would vault operating cost / rider to about $2.59 - a whopping 10% increase.

Well -the $163 million in lost opportunity into 1994 and the $104 million in growth in required subsidy this year would give us back $267 million - which would make the Land Transfer Tax largely unnecessary.

Bussin and Fletcher's mound of dirt

As I've written on before - there's a mound of dirt on the NW corner of Coxwell and Lakeshore. This is where councillor's Paula Fletcher and Sandra Bussin had teh city spend how ever many hundreds or thousands of taxpayer $$$ to buy some rather expensive votes.

Bulldoxers were hard at work before the 2006 municipal election. The mound of earth is there - but no work has been done all summer. Local skateboarders won't likely see anything for at least another year - as it will take at least another year to build anything.

This is the city that needs to raise our taxes by about 20%!

The only thing that got built in this project is this d++d sign. No kidding.

Mel's lament

The Toronto Sun features a column (Joe Warmington - Sun, August 19, 2007) covering commentary by former mayor Mel Lastman on the city's current budget mess. Now Mel has too much personality for many Torontonians - or is this just an excuse on the part of the downtown elite to dislike someone who is not one of there own. However, there's no doubt as to his leadership capabilities.

Lastman is quoted:

His advice to the socialist-majority council is to start listening to those who are not like-minded. "That's what I did," he said. "I made them part of the decision-making. That's how you get ideas."

Sage advice. The only problem is that the hard-left in council don't believe in finding solutions. They deem the concept of finding slolutions - be they via efficiencies, new ideas, and/or making trade-offs - as capitalist and bourgeois. It's no so much a that they lack understanding, but rather a hard-wired scrambling of their brains.

Budgets, budgets, budgets...

...well three budgets to be exact in recent weeks. First was the federal government's version - which has just passed in the Commons. Provincial finance minister Greg Sorbara followed quickly on the tail of Jim Flaherty with the Ontario budget. Lastly, we have Toronto's municipal budget - which thanks to the mayor and the new City of Toronto Act - has appeared out of nowhere.

City Council and the public in general will have scant opportunity to review, or in any fashion influence this latest spend-fest.

To some, the big news out of all this was how the senior levels of government ignored Miller's pleas for a New Deal for Cities - (or sone of the New Deal for Cities - aka the 'One Cent Now' begging bowl.)

Remarkly, even hard-core Millerites such as the Globe's John Barber have pointed out the folly of Miller's campaign. Let's be real, all mayors would like any freebies that can get from anywhere - what's not to like about getting $$$ that you're not accountable for. However, it's only Toronto - with its civic government bought lock-stock-and-barrel by the public sector unions - that needs the money.

Canada's cities are world leaders in municipal financial strength. This is due - in the main - to careful spending and conservative requirements for reserves such as sinking funds. While Toronto does maintain the minimum sinkning funds as required by law, other reserves have been repeatedely raided.

Anyway - back to the budgets. Not only was Toronto ignored, to add insult to injury, the 905 belts' payments into the GTA Social Services Polling arrangement will be phased out over a number of years. The provice will pick up the difference. This actually exacerbates the fiscal advantage that the 'burbs maintain over the city. Unless their politicians catch the Toronto disease, I'd be expecting for reduction in business taxes in these jurisdictions.