Economic Policy Review ISSN 1313 - 0544

Lost in Transportation

Author: Zornitsa Slavova / 17.12.2009
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This week at a meeting of the Budget Committee in the Municipality of Sofia, councilors have discussed the problems of urban transport. Again the main topic is the financing and ineffective work in providing public transportation in the capital. The focus of discussion has fallen on the question of preferential public transportation, as the proposal now is to reduce such. Bravo!

Currently a total of 16 groups of citizens can use preferences (reductions) - the difference between the real value and the price they pay is covered by the municipal (state) budget. In this situation, several issues stand out:

  • Preferences cover a large part of the population. The main groups that are entitled to a discount include pensioners, students and disabled persons, identified as "in need". At the same time there is no explanation of the preferential transportation of some other groups such as police officers, officials of local administration, mountain rescuers, families of workers in urban transport and much more.
  • The preferences go very costly to the taxpayers. It is obvious, that with so many groups paying less than the real price, the public transportation will be in trouble and will deepen its financial problems. Moreover, the price of the preferential travel has not been modified in the last five years, although the double increase in the price of regular travel. Thus, the amount covered by the budget keeps increasing and this year reached 100 million levs.
  • Preferences are not tied to need. Preferential travel in general is a kind of social assistance. There is no reason to cover so many people, some of which absolutely unfounded. The problem is that all this weighs on the taxpayer's pocket, which often has less income that those, which are favored. Preferences (if they should exist at all) should be closely linked to the need and to be used only on the basis of income of individuals. Currently, people with ten-fold difference in incomes pay the same low (preferential) price.

Soon we will see the council decide whether the preferences will really help people in need or will be just another unfounded interference in to the pocket of the taxpayer.