<![CDATA[Ara Balears in English - cost]]> 10 <![CDATA[The invoice]]> Some politicians say that the Sustainable Tourism Tax should go up by two euros. Others want four. Tomorrow someone will propose six. Meanwhile, hoteliers look at it sideways, lest this auction end up going too high. On the other hand, there is a Government that tries not to get too involved, lest someone send them the bill in the next elections. I listen to both sides with a certain fascination, because I am always left with the same question: two or four, based on what? Why four and not three? Why two and not seven? What calculation has exactly led us to that figure?As far as I know, none. It is a very curious way of doing math: first we decide how much we want to charge and then we will look at how much it costs. If we go out to dinner and when we ask for the bill the waiter asks us if we prefer to pay two, four, or six, we will surely ask him for something more elemental: the invoice.Well, that is exactly what we are missing.When a tourist leaves the Islands, they have paid for the hotel, the restaurant, the plane, the rental car, and everything we have wanted to charge them for. But there is another bill that we do not know if they have paid in full: that of the effects their stay leaves on others. There are, therefore, many unpaid accounts. But they are not quite the tourist's fault. They pay what we ask of them. It is we who have not presented them with the full bill.Economists call them externalities: effects of an activity on third parties that are not reflected in the price. The bill we are looking for is the cost that these effects have on the well-being of those of us who live here. And it is not enough to simply add up the expenses of the administrations. Part of the cost appears in public budgets; another part we suffer in the form of congestion, pressure on housing, water scarcity, saturation of spaces or, simply, loss of time and quality of life.Not everything will be easy to convert into euros. What is an hour lost in a traffic jam worth? What is the cost of the fact that finding housing is becoming increasingly difficult? Not knowing how to put a price on something is very different from thinking that it costs nothing.There is another issue that is important to me. When I talk about tourism, I am not just thinking about those who sleep in a hotel or a vacation rental. I am also thinking about those who have a house in the Islands and come here to spend their holidays. The fact that they sleep in their own home does not make the effects of their presence disappear. That house is part of the residential stock, even if it is used only part of the year; and when it is occupied, it consumes water, uses roads, infrastructure, and services.The bill, therefore, should be quite indifferent to where we sleep. A hotel, a rented dwelling, or a second home may generate different costs, but they all must enter the account. If we only look at regulated tourist spots, we leave a part of the activity out of the picture.And counting heads is not enough either. It is not the same to come for three days as it is to spend three months there. It matters how many people come, but also how much time they are there, when they come, where they concentrate, and what pressure they exert on resources that are not infinite. Therefore, rather than the number of tourists, I prefer to speak about the level of tourist activity.Furthermore, the bill does not necessarily have to grow at the same rate as the activity. One more car on an empty road is barely noticeable; on a congested road, it is another story. With water, housing, services, and certain spaces, something similar can happen. When we approach the limits, adding more activity can become increasingly expensive for us.This is what we should know. I am not looking for a big figure that says “tourism costs this much”. I am interested in knowing what bill we have with different levels of activity and how it changes when it increases or decreases. Perhaps some costs grow little and others, a lot. We do not know. And this ‘we do not know’ seems to me quite a bit more rigorous than some figures that circulate with admirable certainty.And so we return to the two euros and the four. At times, the debate over the Sustainable Tourism Tax feels like an auction in reverse. I would start with something quite a bit less exciting: I would make the bill.I would do it, mind you, without deciding beforehand what result we would like to obtain. If there are positive effects that are not already included in the economic activity, they must also be taken into account. If there are things that we cannot estimate with sufficient rigor, it must be stated. We are not looking for the bill to come out big or small. We are looking for it to be credible.Then there are the hoteliers. The employers' associations represent their members and it is perfectly legitimate for them to be concerned about the margins, costs, and competitiveness of their companies. What would be more surprising is if they were concerned first about our profit and loss account. We must listen to them, naturally. They know the business and have information that we need. But it is one thing to listen to them and another, to hand them the calculator.When an employers' association says that four euros can harm competitiveness, it may be right. It could also turn out that four euros were too little. Without knowing the bill, we do not know one thing or the other. The bill for the Islands cannot be calculated by someone who has an interest in it coming out cheap. And it would not reassure me much either if it were calculated by someone who has an interest in it coming out expensive.I would entrust the work to a group of experts of recognized prestige, independent both of the affected sectors and of the Government. Economists and specialists in housing, water, mobility, territory, public services, and the environment. With the data, the methodology, and the possible conflicts of interest on the table. Let them calculate what can be calculated, estimate with rigor what must be estimated, and also state what we cannot know.Then we would indeed have an interesting political debate. What part of the external costs is already covered? Which part remains unpaid? Who should assume it? Does it make sense to charge the same for forms of activity that can generate different costs?Then we can discuss how we should charge for it.Until then we can continue with the two euros, the four, or the figure that brings the most luck that week. But let's not confuse a political position with an economic calculation.Two, four or forty?I don't know.And I am surprised that there are so many people who do.We will only know if there are two, four or forty when we have the invoice.It is time to do it. And only then will we know how much the unpaid bill that tourism leaves us each season really is.

]]> <![CDATA[To evaluate, counter-intuit. The purposes of the subsidies]]> It is well known that in the Islands we have heavily subsidized mobility. Is this the way to supposedly compensate for the costs of insularity? I am not sure that it is. Does the fact that the intercity bus is free for users help make goods cheaper? I would rather say no, to the extent that it inflates demand. Perhaps transport does not have to cover costs in full with its fares, but it is good that we all know the cost of things and what the objective of the reduction is. And, as we have learned with the elimination of tolls, zero cost does not exist: someone else is paying for it. I also do not see the current operation of discounts on ship and plane transport for island residents as being at all clear, when we should instead focus on freight rates if anything. Certainly, transport discounts are on the backs of all Spaniards, in the same way that the deficits of peninsular trains that we islanders do not have are also partly at our expense. But this second justification does not make the first one good. It also makes no sense that, given the subsidies, the taxi transfer from the airport ends up being more expensive than the plane ticket. I do not see in all assumptions sufficient evaluated evidence of positive externalities for such subsidized mobility, nor a sufficient argument for equity, in view of who its greatest beneficiaries are. And the fact is that I verify that there are many false residents who register in the Islands without effectively living there. They are processes of almost free choice, with little cost to those who exercise them, and which benefit the most clever, who are usually the most well-off. Recently this effect has also been verified with the free choice of doctor in the Spanish healthcare system. The richest and most educated know how to take better advantage of it. The lack of effective control otherwise incentivizes the abuse of subsidies. It would be better to have a subsidy system that establishes blackout dates; for example, at the point of origin, entries to the Islands on peninsular long weekends or weekends, and the equivalent at the destination for the same residents traveling to the Peninsula, or setting a lower percentage of subsidy in these mentioned cases. And to prevent companies from taking advantage of it by selectively increasing the prices to which the discount is applied. A fake resident suffers, currently only, as a cost of their fraudulent choice, the fact of not having a primary care physician in the place of effective residence. But the fact that this does not matter already tells us that it is about fairly wealthy people who probably have private insurance and do not use public primary care. With the upcoming limitation of vehicle entries in the summer, it is also necessary to analyze the measure with a magnifying glass regarding the cars of fake residents who pay circulation taxes outside the Islands. And, of course, the large car rental multinationals that seasonally bring in huge fleets of vehicles that have paid taxes outside of our home.However, I do not think some penalties are bad, such as the fact that the fees for some services, such as waste collection, for example, do not distinguish based on the lower use of holiday homes, since the fixed part of the cost and maintenance, more or less, depends on the peaks in demand for which those non-residents are equally decisive. I do believe that volume should have a significant influence on businesses, especially those that are highly seasonal, as they are the ones that set the maximum installed capacity to meet peak demand. Certainly, the regulation of fees, unlike public prices, cannot have net collection effects, but only cost recovery. But if this applies to the full cost of the service, it is necessary to check how this amount is reached, since important issues of efficiency and equitable distribution are at stake. Everything mentioned implies the need to evaluate the measures, particularly the populist ones, as they often have effects different from those postulated. The latest one from the current Spanish government, which extends to 52 years the age of exit from the market for those already considered non-relocatable, with a guaranteed income and a pre-established pension, is an unequivocal case. This measure harms many of those who still strive to work and provide for their own pension by paying contributions that ensure minimum periods, paid out of pocket as the self-employed that they are, even during periods without income. It would be better for them to quit given what they earn and that theirs will be a lower pension than those who have stopped working and live on subsidies and what they can collect from activities without an invoice.

]]> <![CDATA[MÁS raises the cost of Palma's failed bid for European Capital of Culture to almost 100,000 euros]]>

MÁS per Palma accuses the City Council of a lack of transparency regarding the cost of Palma's failed bid to become European Capital of Culture 2031, asserting that expenses have already reached €98,000, exceeding the €80,000 announced by the Councilor for Culture, Javier Bonet. According to MÉS per Palma councilor Miquel Àngel Contreras, the party will submit a formal request for information to obtain a detailed breakdown of the project's associated costs. "There are public contracts, salaries, and other expenses that have not been included," he warned.

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