Governors and mayors hold public transport prices and expand subsidies in election year

As diesel oil more expensive than gasoline for the first time since 2004, and a drop in the number of users accentuated by the covid-19 pandemic, the cost of public transport in Brazil entered the dispute for State resources once and for all. In an election year, governors and mayors across the country began to grant new subsidies or expand existing ones to avoid rising municipal and intercity bus fares or at least reduce the impact of the increase.

Unprecedented survey of National Association of Urban Transport Companies (NTU) shows that at least 264 municipalities, from all regions of the country, supplement the transport fund with budget funds – 42% of them have joined the subsidy in the last two years. The transport crisis has even led the city of Rio de Janeiro, which historically has never financed municipal transport, to implement a mileage-based subsidy model that began operating this month.

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Increase in fuel prices puts pressure on transport tariffs, leading governors and mayors to adopt or expand the payment of subsidies to companies that operate municipal and intercity lines.
Increase in fuel prices puts pressure on transport tariffs, leading governors and mayors to adopt or expand the payment of subsidies to companies that operate municipal and intercity lines. Photograph: Tiago Queiroz / Estadão

“We hope that with the subsidy, the bus companies will have a relief in their cashiers and can return to invest in the fleet and restructure their operations”, said the secretary of transport of Rio, Maína Celidonio.

In cities like Belo Horizonte and Florianópolis, former mayors Alexandre Kalil (PSD) and Gean Loureiro (União Brasil) even proposed measures to maintain and even reduce the price of the tariff months before resigning from their respective positions – both are pre-candidates for the government of their states, Minas Gerais and Santa Catarina. In Goiás, the governor Ronaldo Caiado (União Brasil), which leads the polls for reelection, announced financial aid to stop the increase in bus fares in the metropolitan region of the capital, Goiânia.

Loureiro argues that the complementation policy is essential to encourage the use of public transport, as occurs in large cities around the world. “Without a subsidy, transport would not have an attractive price and would hardly be an option for the majority of the population,” said the former mayor, who held the fare at R$4.38 (for card recharges) and R$ 4.50 (cash price). In the midst of the crisis, the city of Florianópolis also implemented different modalities of integration and discounts. “We obtained an increase in the collection of the municipality, mainly due to inflation”, said Loureiro.

About a month before resigning from the Belo Horizonte mayor’s office to run for governor of Minas, Kalil sent a bill to the Chamber that reduced the value of bus fares by R$0.20 through municipal subsidies. Rejected by the Legislature at the time, the proposal was approved, with changes, last week, when it was agreed to freeze the ticket at R$ 4.50 through financial support of R$ 237 million from the municipality.

According to the administrative and institutional director of NTU, Marcos Bicalho dos Santos, the subsidy for public transport is a national trend. “Any readjustment in diesel needs to be immediately computed in costs. Within the model we have today, in the vast majority of cities, this means compensating in the tariff, which will bring difficulties for the population”, he said.

Where there is financial compensation from the State or municipalities, it represents, on average, 24.7% of the real ticket price. But there are places where the subsidy reaches 50% – as is the case with the Brasília subway. Diesel represents, on average, 33% of the ticket price.

In the capital of São Paulo, this account reached its all-time record: since January, the City Hall has transferred R$ 2.4 billion to companies in the sector in subsidies to keep the tariff at R$ 4.40. If only the fare collection were responsible for covering the costs of the system, the price of the bus would be R$ 8.71, according to the NTU calculation.

“The effort to contain the tariff increase is enormous. Only diesel has gone up 107% in the last year,” said the mayor. Ricardo Nunes (MDB), which has kept the tariff frozen since January 2020 with constant budget adjustments. “This is a time when we need to be sensitive to the increase in poverty.”

But in addition to sensitivity, Nunes follows a practice adopted by the City Hall and the state government since 2012: equal prices for bus and train tickets purchased in the capital. Pre-candidate for re-election, the governor Rodrigo Garcia (PSDB) also held the price charged by the Metro and Companhia Paulista de Trens Metropolitanos (CPTM) this year.

The mayor of São Paulo, Ricardo Nunes (MDB), and the governor of the state, Rodrigo Garcia (PSDB), say they are trying to contain transport tariffs;  without subsidy, the price of the bus in São Paulo would be R$ 8.71.
The mayor of São Paulo, Ricardo Nunes (MDB), and the governor of the state, Rodrigo Garcia (PSDB), say they are trying to contain transport tariffs; without subsidy, the price of the bus in São Paulo would be R$ 8.71. Photograph: Werther Santana/Estadão

In a note, the Metropolitan Transport Department stated that, unlike the monthly subsidy assumed by the City Hall, the State helped the system in a timely manner during the pandemic: “To sustain the operation, covering the losses resulting from the drop in collection, the government of São Paulo injected R$1.6 billion into the system’s operation in 2020 and more than R$700 million in 2021″.

A benchmark for quality in public transport, Curitiba also approved a law to subsidize the system by R$174.1 million this year and keep the fare at R$5.50. According to the project, the budget supplement will prevent the fare from rising to R$ 6.37 – the real value of the cost per passenger in the capital of Paraná.

While adopting specific policies, mayors and governors defend that the Union also starts to bear part of the bill, at least of the gratuities guaranteed by federal law. A bill that addresses the issue has already passed the Senate and is awaiting approval by the House.