Behind all the pages, baffles, recriminations, and special carve outs, the health care legislation we have before us stands as a huge giveaway to America’s insurance industry.  The president and his minions in congress have given a group of “fat cats,” in the president’s wonderfully childish and hypocritical phase, more on which to dine.

• The bill would insist that all Americans buy health insurance, that is, give these companies business.  Since most of those who have forgone insurance to date are young and healthy, these new customers would offer the most lucrative sort of business.  Of course, the new law would also forbid the insurers from discriminating against those with pre-existing conditions, but since these people would constitute only a small part of the new customer base, it would be a small price for the companies to pay for the business.
• For those who cannot afford the price of their now required premium, the law would offer a subsidy from the public purse, that is the taxpayer would transfer funds to the insurers.
• The legislation would force an excise tax on luxury, so-called “Cadillac” plans, unless, of course, you are a member of some politically well-connected union, but that charge should hardly upset the insurers, since it would raise monies to pay for the otherwise lucrative new customers.

In the meantime, the new law would siphon funds from Medicare, a plan closer to socialized medicine, in order to better equip the authorities to subsidize all these new health insurance customers.  If this works, the next thing Obama will do is help Detroit by requiring all Americans to buy a Chevy and then subsidize any who cannot afford the purchase with a special excise on successful car makers.

By Edwin S. Hopson

On December 19, 2009, President Obama signed into law a measure that provides for a 6 month extension of the COBRA subsidy for unemployed persons and a 2 month extension of the eligibility period.  The COBRA subsidy, which was set to expire December 31, 2009, requires employers to pay 65% of the cost of COBRA for eligible unemployed workers, but also allows employers to take an offset of that cost against payroll taxes due the federal government.  The measure also included an additional 13 to 20 weeks of unemployment benefits and a raise in the benefit payment of $25 per week.  This legislation was inserted in the massive Defense spending bill - H.R. 3326 -  which was approved by a vote of 395 to 35 on December 16, 2009 in the House. Tthe Senate passed the bill on December 19, 2009.

With less than two weeks left in the year, the U.S. Senate on Saturday passed legislation that extends until the end of February eligibility deadlines for some key unemployment benefits.

That’s especially important in Michigan, which continues to have the nation’s highest unemployment rate – 14.7% in November.

Attached to the $636-billion defense spending bill passed on an 88-10 vote by the Senate on Saturday morning, the unemployment extensions now go to President Barack Obama for his signature, which is expected to come quickly.

U.S. Sen. Debbie Stabenow of Michigan said the unemployment extensions and other measures provide help at a time when Michiganders “are struggling to put food on the table, pay heating bills, and afford the health care they need.”

“While recovery from this recession and the creation of jobs cannot come quickly enough, I am relieved Congress was able to pass these important measures to soften the blow of unemployment,” added Michigan’s senior U.S. senator, Carl Levin.

The legislation makes some key changes to programs which were set to expire. For instance:
•The congressional stimulus bill passed in February created a program that paid 65% of monthly insurance premiums for people who lost their employer-based health care coverage because they were laid off. But that program was only open to people who lost their jobs – and their coverage – by the end of 2009. The new bill extends that eligibility deadline by two months, until the end of February 2010.
•It also adds six months to what was a 9-month period that the federal government would make the 65% of payments through the COBRA health plan, extending the period of payments to 15 months.
•The legislation also extends the deadline to qualify for additional unemployment benefits. Last month, Congress passed legislation adding 14 more weeks of emergency benefits – and six more on top of that for people in hard-hit states like Michigan. But they were only available to people exhausting all their other unemployment benefits by the end of December. The new bill extends that deadline to the end of February.
•It also maintains 2009 federal poverty guidelines – which if reset could have moved some people off food stamps and Medicaid – and adds additional funding to the food stamp program.
•Finally, the legislation authorizes the Small Business Association to continue programs to make loans more attractive to borrowers and lenders, in order to free up credit for businesses.

According to The Des Moines Register, “Soybean growers are losing hope that Congress will prevent the $1-a-gallon tax subsidy for biodiesel from lapsing at the end of the year, shutting down some biodiesel production. The credit is due to expire Dec. 31. The House passed legislation extending the credit through next year, but the Senate is bogged down in the debate over health care and is likely to do little else other than a defense funding bill.” AgricultureOnline points out that, “If the biodiesel industry wants to survive into 2010, it may have to convince one or two Republican senators to break ranks from GOP stalling tactic.”

WASHINGTON-The U.S. House of Representatives overwhelmingly approved legislation Wednesday that would extend the federal subsidy of COBRA health insurance premiums for employees who are involuntarily terminated.

Embedded in H.R. 3326, a measure appropriating funds for the Department of Defense, the nine-month, 65% premium subsidy would be extended by six months to a total of 15 months. It would apply to those who lose their jobs through Feb. 28, 2010. Under current law, employees who lose their jobs after Dec. 31 are ineligible for the subsidy.

The measure, approved on 395-34 vote, also would provide an additional six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.

In addition, the legislation would give beneficiaries whose subsidy ran out and who didn’t pay the full premium a second chance to opt for coverage. For example, a beneficiary whose nine months of subsidized coverage ran out Nov. 30 and who didn’t pay the regular unsubsidized December premium could pay the 35% premium share in January and receive coverage for December.

The legislation would require employers to notify current COBRA beneficiaries and future beneficiaries of the new 15-month premium subsidy.

The House also is expected to take up another appropriations bill, H.R. 2847, with a provision that would extend the premium subsidy to those who lose their jobs through June 30, 2010.

The Department of Defense bill, Washington observers say, is on “fast-track” consideration and could be quickly approved by the Senate.

The House will consider the COBRA subsidy expansion as part of the House Amendment to the Senate Amendment to H.R. 3326 – Department of Defense Appropriations Act, 2010.
If enacted in its current form, the provision would:
a) Change the end date of eligibility for the ARRA subsidy from December 31, 2009 to February 28, 2010;
b) Expand the ARRA premium subsidy to 15 months (increased from current 9 months);
c) Allow a period for the retroactive payment of premiums for assistance eligible individuals (i.e., individuals who were entitled to the subsidy) whose subsidy period expired on November 30th and who failed to pay their premium for December coverage. The retroactive period is 60 days, commencing with the enactment of the provision or, if later, 30 days after provision of the Notice described in d below. The same refund/credit rules under the original bill apply to any AEI whose subsidy expired in November and who have since paid the full COBRA premium.
d) Require a special Notice to all assistance eligible individuals who are on COBRA on or after November 1st or whose qualifying event is a termination of employment occurring on or after November 1st, describing the new 15 month premium subsidy. Note: Going forward most administrators will incorporate this additional notice in their standard COBRA package; and
e) Address an issue with regard to the original subsidy (i.e., both the qualifying event and the 18 month COBRA period must commence prior to the original sunset date of December 31st) by conditioning eligibility for the COBRA subsidy only on a qualifying event that is the involuntary termination of employment occurring on or before the new February 28, 2010 sunset date, without regard to when the COBRA coverage period begins. Thus, for employers providing subsidized coverage that defers the COBRA start date, the 15 month period (which is applicable only to the COBRA period) may not commence until well into the future.

From the Star, dateline 2009-12-16:

The ban on the sale of petrol and diesel over 20 litres to foreign cars within a radius of 50km from any point of entry into the country will take effect today.

Domestic Trade, Cooperative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said the ban, which was aimed at preventing the smuggling of petrol and diesel, would be in place until a new mechanism for the management of oil subsidy is implemented in May next year.

“Directives have been issued to all petrol stations in the stipulated areas on the new ruling. We have also issued notices to all foreign-registered vehicles in the country informing them of the new regulation,” he told reporters at the Parliament lobby yesterday.

With the ruling, he said, only Singapore-registered vehicles were allowed to leave Malaysia with more than 20 litres in their tanks as the authorities in the republic had already imposed a ruling that all vehicles crossing its borders must have their tanks at least three-quarters full of fuel.

I’ve always thought that the petrol stations whose main source of income (and the most vocal in complaint) is selling subsidised fuel to foreign cars, should be considered to be the same category as raiders of our national coffer. Think about it, they are colluding to give away a subsidy meant for the rakyat (at the cost of say RM1/liter) to foreigners. Where do you think that money came from, and whether it is better spent here at home?

You can subscribe to an online version of the paper at the Bluehyppo site, follow links to e-browse.

User-friendliness is the key

To make a system mainstream it must be popular in patronage and should be a major tourist magnet. Popularity should be the single focus and all issues should be judged accordingly.   Public transport systems all over the world struggle.  Many networks, even in cities with high density and tram tradition, depend on heavy government subsidy to survive.  Australia does not have high density nor can it be called a tram homeland.  Any tram system, traditional or dynamic capacity, for it to avoid the deficit trap, must achieve not medium but high patronage .  Marginally viable systems can be supported by governments and patronage propped up by subsidised fares.  Sooner or later however the enthusiasms of tax payers and various governments vanes and the system settles on a lower level.

Only genuine, market driven high patronage is true viability.  In best case it can even achieve independent profitability for the operator. If achieved without or with only little government subsidy, it is sustainable, avoids the drain on the public purse and avoids taxpayer’s anger.  Morever, only a profitable system will imbue the rest of the economy. Lukewarm or propaganda driven popularity on the other hand is not sustainable.  Worse, sooner or later it promotes dullness, a known poison for tourism.

This leaves the question of how to make the system popular; how to genetate and maintain high patronage?

The answer is short: user-friendliness.

The American Recovery and Reinvestment Act launched a temporary government program to subsidize the often crippling cost of buying health insurance through a former employer’s plan after a layoff. If the subsidy is not extended, hundreds of thousands will lose the subsidy, forcing them to pay health insurance premiums that are three times higher.

Source:
http://articles.latimes.com/2009/dec/01/business/fi-cobra1

The other day, my best friend (yep, the one with my long-awaited god-child!!! =D ) looked at me in great frustration.

“What are you doing all this for? What’s the point? I don’t see why you have to offend half of Singapore, why can’t you just be normal and watch TV?! All these things that you activists do are just useless yelling — at the end of the day, the poor still remain poor, and you still go home to your air-con room!”

I gave her words serious thought, because this was someone who said this to me out of genuine concern rather than spite.

And because I gave it thought, I realised that all our yelling & offending, was NOT useless at the end of the day. It might take a lot longer to see results, than say, a teacher’s job or a doctor’s job. But there are results. The feminist movement that started in the 1800s offended lots of people too, and even today, it continues to. Yet the results 200 years after the feminist movement began is so stark and apparent. 

 Women today get to study and work, because of these feminists yellings 200 years ago. Think about your family (or the average family). Think about how much your family income comes from your mother, or daughter or sister. If you’re a working woman, think about how you can decide on how you want to spend your money and when, rather than how you need to beg your husband for money. It might have taken 200 years, but all that yelling was necessary, and useful.

Looking closer, at what we’re yelling about today, in Singapore, we also see the effectiveness of our yelling.

I’m talking in particular about activists for HIV Awareness and fair treatment, today being World AIDS Day.

In Singapore, we’ve come from a place where no subsidised treatment is given to HIV patients, to today, where MOH is deliberating which drugs to subsidise.http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_308873.html

We’ve come from a place of ignorance and prejudice, from moralistic uprighteousness,  to today, where HPB is addressing the myths and misconceptions. Where even HPB, a public non-religious agency, recognises the need for love and compassion http://www.loveamp.sg/default.aspx#/home

We’ve come from a place of riducule and voyeurism in the media, to a positive dignified campaign on Singapore Idol http://idol.mediacorptv.sg/loveamp.htm

We’re not 100% there yet, but we’re moving forward, our yelling is being heard, and we need to continue and perservere in our efforts. We need to aim for that 100%

In the words of my friend who, together with his wife, are infected with HIV and travel to Bangkok to get more affordable treatment

“ I am living a very good life now with the cheaper Anti Viral drugs,
I could actually forget about that I am even a sufferer but even that
I practiced safe sex with my wife.
I hope one day the government in Singapore consider us sufferers who work
and pay taxes to them and they in turn help us the way Thai Government do
and it is only a small percentage of us here compared in Thailand they have
over a Million sufferers and still the government was able to assist some way
or another to prevent many from dieing because they could not get the
expensive medication.”

PS. For people who need help with HIV treatment, subsidies are not yet available. However, there are financial support schemes made possible by generous individuals, so hope is not lost. The medical social workers at hospitals here are quite understanding and will help you. You can approach Action for Aids too www.afa.org.sg   Or you can write to me anonymously and I’ll try to link you up to people who can help.

RUSSELL HARDING, in an Op-Ed published in yesterday’s NYTimes, explains the growing disaster behind growing corn for ethanol:

(…) Ethanol prices trend higher and lower along with the price of gasoline, yet the cost of producing ethanol tends to rise with demand, since higher ethanol production exerts upward pressure on the price of corn. In a free market, corn prices might be expected to eventually fall as the market adjusts to increased demand. But because the government heavily promotes ethanol use through subsidies and regulation, the market is continually strained.

The problem is magnified because corn is a water- and fertilizer-intensive crop that requires considerable investment. Worse, since fertilizer is often an oil-based product, the cost of growing corn tends to rise at the very moment ethanol prices, which rise with oil prices, might bring a good return.

Read the complete text here.

BANGALORE: Transport Minister R. Ashok on Tuesday said the Government will offer a subsidy of Rs. 10,000 to autorickshaw owners who wish to replace their two-stroke autorickshaws with four-stroke engines.

Green autos are fitted with four-stroke engines and run on LPG.While over 800 green auto rickshaws have so far been registered in the city, the Minister flagged 50 such vehicles at a ceremony in front of the Vidhana Soudha. He said green autos will become mandatory in Bangalore.

Besides subsidy for replacing the vehicle, the Government will offer Rs. 3,000 subsidy for installing LPG kits in autorickshaws across the State and Rs. 1,000 for installing digital meters.

With a combination of four-stroke autorickshaws, LPG as the fuel and digital meters, the Government aims at reducing environment pollution and enhancing passenger comfort.The subsidy will be offered to owners of existing autorickshaw owners so that their old vehicles are replaced with new four-stroke vehicles, Mr. Ashok said.

Reference:

www.hindu.com

Michael Giberson

I am mildly amazed that it is possible to take something as simple as, say, palm oil or soybean oil, and – with a few relatively simple chemical tricks – turn it into motor vehicle fuel.  [See it on YouTube.] However, I’m not so amazed that I’m willing to pay you or anyone else a $1 for every gallon of the fuel produced.

The biodiesel business in the United States is hoping that enough people remain amazed at the simple techno-wizardry that they can continue to claim a $1 per gallon federal tax break.  The tax break, which has been around since 2004, will expire at the end of this year unless Congress approves another year of subsidies for the companies.

The Houston Chronicle suggests that several biodiesel companies are having a hard time making money even with the $1 per gallon subsidy.  The story does, briefly, hint that there could be some sort of public benefit involved in the production and consumption of biodiesel (“help reduce greenhouse gas emissions and oil consumption”), but nowhere else in the article does anyone express concern over anything other than how the loss of the subsidy will hurt the economic fortunes of the subsidized companies.  Instead, the concern is mostly for protecting investors in the biodiesel business (Comments: “[Loss of tax support] would be devastating,” “The tax extension is critical to an industry that is on life support,” “Every day that policy doesn’t get passed hurts us”).

I admit, biodiesel is a neat trick, just not so neat that I want to pay to keep these guys in business.

[As of today, the most current information on biodiesel that I could find on the EIA website only covers through the end of 2008, so it doesn't reveal if U.S. producers have been hard hit by the loss of the European "splash and dash" market.]

AmTech analyst Brian Marshall made comments last week indicating AT&T’s exclusive agreement could expire in June 2010. This would open the floodgates to other carriers to begin carrying the iPhone. There has been a great deal of speculation that the iPhone has hardware capable of running on the Verizon network.

It is believed that Apple receives a $450 (per iPhone) subsidy from AT&T. That would most likely shift to $300 when other carriers come into play.

Growth Energy, a new corn ethanol lobby group, put our a press release today calling on Congress to ease the installation of pumps that dispense mid- and high-level ethanol blends. According to a letter written to the Senate Finance and House Ways and Means committees, the organization says the Alternative Fuel Vehicle Refueling Property Credit, which should allow fuel vendors to recapture up to $50,000, or 50 percent, of the total cost of installing alternative fuel dispensing systems is being undermined by an Internal Revenue Service (IRS) interpretation that retailers are only allowed to take credit for a portion of the new pump – instead of the entire pump.

Can someone please tell me why we, as
Americans, would support this bill?  What are we hearing from the Senate
bill?

It’s too bad the health care overhaul that House Democrats narrowly approved last week isn’t a medical product. If it were, it would have to come with a warning label, Which could read something like this:

WARNINGS:

•This product will increase your health insurance premiums. Millions who are satisfied with their current, low-cost health plans would have to switch to more expensive plans, solely because Congress decided they weren’t buying enough coverage.

The legislation would increase premiums even further over time, as drug companies, chiropractors, acupuncturists, fertility specialists and other special interests lobby Congress to force you to purchase coverage for their services too.

•This product will reduce the quality of your health care. America’s health care sector is often inconvenient, poorly coordinated, and makes less use of information technology than your local supermarket. Research shows that medical errors kill as many as 100,000 Americans per year.

Markets would solve those problems, but government thwarts doctors and entrepreneurs who try to improve quality. Medicare – by far the largest purchaser of medical services in the world – actually penalizes doctors and hospitals that reduce medical errors.

The House bill would cement those deficiencies in place with yet another massive government program, and create new quality problems, like insurers skimping on care and customer service for the sickest patients.

•This product probably won’t make you healthier. The House bill would expand coverage, but at a steep cost and with zero evidence that doing so is a cost-effective way of improving health.

Little research supports the notion that broadly expanding insurance coverage makes people healthier. Medicare established near-universal coverage for the elderly, yet research shows that program didn’t save a single life in its first 10 years of operation. Whether it has had any subsequent impact on mortality rates – positive or negative – remains an open question.

•This product will make you poorer. The House bill contains at least $2 trillion in explicit and implicit taxes. Tax rates for wealthy Americans would rise to 45 percent, with an ever-expanding definition of “wealthy.” For the middle class, effective tax rates would average 60 percent to 70 percent and exceed 100 percent in some cases.

•This product will make your children poorer. Since the bill would actually increase the federal budget deficit, the tax burden would grow over time.

The bill purports to cut Medicare spending, but those cuts are not likely to happen. Want proof? At the same time House Democrats promise future spending cuts, they are gutting $210 billion of spending cuts promised by past Congresses.

And like most government health care programs, this bill’s actual costs will exceed current projections. In 1967, Congress predicted that Medicare would cost $12 billion in 1990. Medicare’s actual cost that year was $110 billion. Oops.

When this bill causes the deficit to explode, Congress will come after your children’s paychecks. Congress has increased Medicare taxes on average once every four years – and Medicare’s still $90 trillion in the hole. House Speaker Nancy Pelosi, D-San Francisco, suggests that maybe Congress should impose a European-style value-added tax.

•This product will make you irrational. Spending other people’s money has a way of making people nutty. Pelosi thinks that under her legislation, “There is a cap on what you pay in but there is no cap on the benefits that you receive.” Limited costs, but unlimited benefits? Really?

After a few years of Pelosicare, you yourself may vote both to eliminate wasteful health care spending and to protect all existing hospitals and doctors’ jobs. And you’ll wonder why Congress can’t do both!

But hey, why not be irrational? Socialized medicine socializes the cost of that, too.

•This product will make you resent immigrants. The House bill would offer hidden subsidies to undocumented immigrants in a new national health insurance “exchange.” Turning America’s health care sector into a welfare magnet for immigrants will fuel anti-immigrant sentiment. Pretty soon, we’re France – in more ways than one.

•This product will make you feel like you’re being watched. When taken in combination with its Senate counterpart, the bill would create a national identification system to monitor compliance with its mandates and determine eligibility for its subsidies. With the ability to collect data on every American, the government will always find new uses for any national ID system.

The Pelosi bill is neither safe nor effective. If it were medicine, the Food and Drug Administration would have to ban it.

My gas cylinder ran out today. I am one of the few lucky Indians with a subscription to a second cylinder, so I could attach a full one. It made me think.

Our government cannot ensure an uninterrupted supply of cooking gas to all citizens. It makes a small amount of kerosene available through the public distribution system, which reaches only a fraction of the citizens. Even then the one liter of kerosene they get in a week, if they get it at all, is not enough to cook a meal for the week. So how does the government expect the citizens to cook? Or does it expect a (large) fraction of the population to remain badly fed?

And all this while the biggest subsidy on natural gas is being fought over by two brothers in a courtroom drama fit for prime time.

Senate Bill Would Boost, Extend Federal COBRA Subsidy

With hundreds of thousands of laid-off employees soon to lose a federal subsidy of their COBRA health insurance premiums, more lawmakers are introducing legislation to extend and increase the subsidy.

November 13, 2009

Senate Bill Would Boost, Extend Federal COBRA Subsidy

With hundreds of thousands of laid-off employees soon to lose a federal subsidy of their COBRA health insurance premiums, more lawmakers are introducing legislation to extend and increase the subsidy.

Under bill S. 2730, proposed by Sens. Sherrod Brown, D-Ohio, and Bob Casey, D-Pennsylvania, the nine-month subsidy would be extended by six months, to 15 months, and the 65 percent federal premium subsidy would be raised to 75 percent.

In addition, workers who lose their jobs through June 30, 2010, would be eligible for the subsidy. Under the current law, employees who lose their jobs after December 31 will not be eligible for the subsidy.

And because of the unusual way the current law is written, employees laid off before December 31 but whose COBRA eligibility doesn’t begin until next year also would not be eligible for the subsidy. That could happen, for example, if an employee is laid off in mid-December and the individual’s former employer voluntarily extends group coverage through the end of the month.

“This legislation will make health care coverage more affordable for laid-off workers and bring some security in troubling times,” Sen. Casey said in a statement.

A somewhat similar bill was introduced in the House last month by Rep. Joe Sestak, D-Pennsylvania. The Sestak bill, though, would keep the subsidy at 65 percent.

The proposals come as the subsidy soon will run out for laid-off employees who became eligible for the subsidy when it started, which generally was March 1.

A Hewitt Associates study found that the percentage of involuntarily terminated employees opting for COBRA doubled to 38 percent compared with the opt-in rate in the several months before the subsidy.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

 Further updates regarding the information, issues, and policies of this article will be provided on this blog as they come!!!  Please continue to follow us for current information…

Senate Bill Would Boost, Extend Federal COBRA Subsidy

With hundreds of thousands of laid-off employees soon to lose a federal subsidy of their COBRA health insurance premiums, more lawmakers are introducing legislation to extend and increase the subsidy.

November 13, 2009

Senate Bill Would Boost, Extend Federal COBRA Subsidy

With hundreds of thousands of laid-off employees soon to lose a federal subsidy of their COBRA health insurance premiums, more lawmakers are introducing legislation to extend and increase the subsidy.

Under bill S. 2730, proposed by Sens. Sherrod Brown, D-Ohio, and Bob Casey, D-Pennsylvania, the nine-month subsidy would be extended by six months, to 15 months, and the 65 percent federal premium subsidy would be raised to 75 percent.

In addition, workers who lose their jobs through June 30, 2010, would be eligible for the subsidy. Under the current law, employees who lose their jobs after December 31 will not be eligible for the subsidy.

And because of the unusual way the current law is written, employees laid off before December 31 but whose COBRA eligibility doesn’t begin until next year also would not be eligible for the subsidy. That could happen, for example, if an employee is laid off in mid-December and the individual’s former employer voluntarily extends group coverage through the end of the month.

“This legislation will make health care coverage more affordable for laid-off workers and bring some security in troubling times,” Sen. Casey said in a statement.

A somewhat similar bill was introduced in the House last month by Rep. Joe Sestak, D-Pennsylvania. The Sestak bill, though, would keep the subsidy at 65 percent.

The proposals come as the subsidy soon will run out for laid-off employees who became eligible for the subsidy when it started, which generally was March 1.

A Hewitt Associates study found that the percentage of involuntarily terminated employees opting for COBRA doubled to 38 percent compared with the opt-in rate in the several months before the subsidy.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Further updates regarding the information, issues, and policies of this article will be provided on this blog as they come!!!  Please continue to follow us for current information…

Recently came the news that the TTC would be forced to increase their fares to offset higher operating costs, due to an expansion of service. This hike would result in an increase of the adult fare from $2.75/ride to $3.00/ride. Today, the commission will meet to determine ways in which to cover their operating costs.

Now, all transit systems that I know of in North America recieve some sort of government subsidy– it is the nature of the business. According to the City of Toronto, American systems recieve, on average, a 60% operating subsidy, while the TTC recieves a 20% subsidy, solely by the City. Obviously this is not nearly enough. In fact, apart from the TTC’s cousin GO Transit, very few transit systems have a cost-recovery ratio from the fare box as high as the TTC does.

What this means is that the TTC is relying on riders to cover much of their costs, and indeed, their increased costs. This can result in a tricky catch-22 type of situation– in order to carry more riders, costs must increase and therefore fares must increase, but fare increases dissuade ridership.

Let me be clear, I am not advocating against a fare increase. In fact, a quick study of fares for other services around the province shows that $3.00 for an adult fare is not that far out of line. However, what is out of line is the cost of a Metropass, the monthly pass– where 40% of the TTC’s fare revenue comes from. The proposed increase, as of Nov. 4th, was from a monthly cost of $109 to a monthly cost of $126. That means that a rider would have to be making 42 rides per month to break even. This is not how a monthly pass is supposed to work. Recently, Adam Giambrone, the TTC Commissioner, stated that he would like to see the raised Metropass fare to be only $121. I hope that he isn’t looking to be a hero by reducing a 15% fare increase by a measly $5.

For comparison’s sake, let’s just look at Montreal’s fare structure: cash fare, $2.75; 10 fares, $20.00; monthly pass, $68.50. Obviously, Montreal’s monthly pass is intended to reward riders for their frequent use of the service. The same can’t be said for the TTC; rather, it appears their monthly pass is a tool used to gouge their most loyal customers.

In summary, the adult fare should be increased to $3.00 a ride. The Metropass should not be increased to $126, and a case can be made that it shouldn’t be raised at all. The TTC’s operating subsidy needs to be increased; somehow, someway, it’s got to get done. Lastly, the TTC should look at 90-minute fares– that is, someone who just wanted to pop in to the grocery store for a few things and then go home should be able to use the same fare. This, in my opinion, will increase ridership and revenue, as people with choices (such as taking the car) will choose the TTC instead.