• The TTC’s operating budget (the cost to run the system on a day-to-day basis) and its capital budget (the cost of new equipment such as streetcars, subways, station renovations, route modification projects, etc.) are two separate entities and money cannot legally be transferred from one to another (i.e. “Hey, why would the TTC renovate Museum Station but not be able to afford to run the bloody buses next year?  That’s so stoopid [sic]“).
• The capital budget gets its funding heavily from the federal and provincial governments (e.g. TransitCity, new buses) as these are warm fuzzy (see: politically advantageous) news stories – but not before a lot of begging and pleading.
• Fare revenue makes up about 70% of the TTC’s operating budget.  Compare that to 36% in NYC, 44% in Boston, 57% in Montreal and 54% in Vancouver.  The rest of money comes from government subsidies and TTC revenue generation (e.g. advertising, etc.).  This makes the TTC’s operating budget the least subsidized in North America.
• Until the Harris government in the 1990s, the province used to shell out 50% of the TTC’s operating budget.
• All Toronto budgets must be balanced as per the delegation of financial duties between the province and municipalities.  The city cannot run a deficit.  Therefore, it’s a zero sum game.

Where do you want to point your finger now?  If the public is so outraged, why aren’t they knocking on the right doors?