According to her demographic characteristics, Sofía is an example of a typical Rosario. She is between 25 and 45 years old, and still lives in her parents' house, where she plays the role of daughter and not head of the household. Her house has connection to the running water network, natural gas network and sewer network services. Regarding her training and insertion into the labor market, Sofía has been able to complete her secondary studies, and fortunately she has a job.

Although the latest news we have about Sofía comes to us from mid-2015, currently we cannot affirm that her situation remains the same, or that even her characteristics have actually been those (INDEC review through). What we can conjecture is that Sofía is one of the 10 million users who use the service every month. urban passenger transport (TUP) in the city of Rosario.

The report , deals with a topic that - at least once a year - sparks controversy among Rosario residents: the transportation system and the price of the bus. That is, it deals with what seems to be the typical way of moving within the city. It is structured as follows: the first part describes the characteristics of the TUP in Rosario.

In the second, reference is made to the cost structure, and the process that led to the current tariff scheme. Finally, reference will be made to the characteristics that the new document presents with respect to the organization of the system, and that its intention is to reorder the routes of the bus lines into three types of networks.

For now, in this entry we will show a brief summary of the main topic of debate: the financing of the system, and its relationship with the cost of the ticket.

Pay out of pocket or pay with taxes (or not pay)

In general terms, the title summarizes the ways of financing the transportation system. Perhaps the distance that is established between the payment of a generic tax, until its application in basically any public service, makes the user lose the perspective that the transportation system is not only sustained by the cost that each user assumes per ticket, but also by multiple forms of taxation.

Indeed, the following table shows that, in recent years, there is a systematic difference between the cost study that is prepared by the Rosario Mobility Entity (EMR) and the final price of the ticket. It is worth clarifying that, in the price derived from the cost study, the contributions that the different levels of government (nation, province and municipality) make to the TUP are already incorporated.

Even so, as can be seen in the last column, the difference between what is actually paid out of pocket and what should be paid always shows a negative difference against the financing of the system. All of the above, under the quality parameters that the municipal regulations themselves propose.

Thus, the point that guides the preparation of our report revolves around the following question: What are the consequences of maintaining this discrepancy sustained over time? Before moving forward with the analysis, it is clear that two extreme options are open: either the cost study overestimates the resources that are necessary to keep the TUP functioning, or the lack of resources ends up harming in some way the provision of the TUP. service (or combinations of both). In this regard, our work assumes that the cost study prepared by the EMR is correct.

In that sense, the table shown below is the result of estimating the differences in resources that would be occurring if prices were multiplied by quantities. The first column shows the result of multiplying each passenger per fare segment by its corresponding out-of-pocket cost of the ticket, also according to fare segment. While in the second column, the same procedure is replicated, but multiplying by the ticket derived from the cost study.

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For this table to make sense, we must assume that transportation demand is perfectly inelastic. That is, it is insensitive to price variations. Thus, the difference between the first two columns is reflected in the third; which shows a theoretical deficit expressed in nominal terms, for all the years under study.

In this regard, the existence of an item in the municipal budget, which functions as a kind of direct subsidy to companies providing transportation services; marks an indication that the lack of resources in the system is more than a hypothesis. Indeed, between 2013 and 2016 the nominal amounts for this item have increased by 90%. However, it should not be lost from perspective that accumulated inflation for the same period is approximately in the order of 190%.

Thus, the last column shows that the TUP incurs a theoretical deficit before VAT in the last three years. Given the amounts shown there are expressed in nominal terms, it does not make sense to establish an intertemporal comparison between them. However, when the ratio between the theoretical deficit and effective income to the system is calculated, it can be seen that the percentage of theoretical debt over income rises from 2,11% in 2014 to 5,45% in 2015; to culminate in 8,28% in the 2016 estimate.

To have a greater perspective on this problem and delve into other aspects of the financing of the transportation system, we invite you to read the full report. Enjoy it!