The City of Toronto and the province will discuss a new long-term funding deal for the Toronto Transit Commission. (CBC News)

A new agreement to provide stable provincial funding for the Toronto Transit Commission will be in the works, but both city and provincial politicians say a deal won't be in place until next year at the earliest.

Toronto Mayor David Miller said in a press conference Tuesday morning that the city "needs the province to return to the sustainable transit operating funding that was in place for decades prior to amalgamation."

As Toronto released its 2010 budget Tuesday morning, the numbers indicate that the TTC continues to be the budget team's biggest challenge.

The $219-million surplus from last year's budget will be applied entirely to this year's TTC operating budget, which is set at $1.4 billion, up from $1.3 billion last year.

In early January, the TTC raised its fares nearly across the board. Adult cash fares rose from $2.75 to $3 while monthly Metropasses rose from $109 to $121.

The TTC and the province used to split the cost of subsidies, but that ended in 1996 under the Mike Harris government. Since then, Toronto has been relying on one-time payments from the province to balance the books, including $100 million in 2006 and 2007, $149 million in 2008 and $238 million last year.

The city and province have agreed to discuss a long-term agreement that would help with the TTC's funding shortfalls, though it won't be finalized this year.

"It won't happen for 2010, but that long-term agreement hopefully will be in place 2011 and beyond," said Joe Mihevc, the TTC's vice-chair. "That will help us stabilize our revenue and then also help us to not have to increase fares the way we had to this year by 25 cents."

Politicians at Queen's Park Tuesday declined to speculate on how much money would go toward the TTC in a new deal.

"Ideally, we'd like to find a way to address that in the long-term, but this is our toughest year as well, not just theirs," said Ontario Premier Dalton McGuinty.