From the 2026 budget audit
12 billion Ft covers transport deficits — and removes the signal about which routes anyone actually uses.
A standing central subsidy for local public-transport operating deficits detaches the operator's revenue from what riders value, funding the routes the formula rewards rather than the ones passengers would pay for.
About 3,000 Ft per taxpayer per year — 12 billion Ft total — covers local transport deficits centrally, including in municipalities that provide no local transport at all.
What you see — and what you don't
The seen: bus and tram riders whose fares are held below the cost of carriage. The unseen: the general taxpayer — including those in towns with no local service — who funds the gap, and the passengers whose actual route preferences are never signalled because the operator's revenue doesn't depend on them.
Objection
"Without the subsidy, local transport fares would rise or services would be cut, hitting those without cars hardest."
Answer
The reform is not to abolish transport but to replace the open-ended deficit cover with transparent, tendered service contracts: the municipality specifies the routes it wants, tenders them, and funds any subsidy explicitly from its own budget. Routes the local electorate genuinely values survive; those that exist only because the deficit is centrally covered do not. The five-year horizon lets operators and municipalities re-procure transparently.
Share if you think public-transport subsidies should be transparent and locally accountable, not hidden in a central deficit cover.
The analyst's verdict
Support for the mandatory local public-transport task
Rationale
Subsidises the operating deficit of local public transport that municipalities are statutorily obliged to provide. The seen beneficiary is the rider whose fare is held below the cost of carriage; the unseen cost-bearer is the general taxpayer, including those in municipalities with no local transport at all and those who never use the service. More importantly, a fixed operating subsidy to a deficit is precisely the soft-budget-constraint pathology: the subsidy detaches the operator's revenue from the value riders place on the service, so there is no signal telling the operator which routes, frequencies, or fare structures the riders actually want. Capital and labour are then allocated to the routes the subsidy formula rewards rather than the routes passengers would pay for. The reform is not to abolish local transport but to abolish the open-ended deficit subsidy: move to a transparent, time-limited service contract where the municipality specifies the routes it wants and tenders them, with fare revenue and any explicit subsidy both visible. The function survives; the soft budget constraint does not. The five-year horizon protects current operators and lets municipalities re-procure on transparent contracts.
Transition mechanism
Linear five-year phase-out of the central deficit subsidy, paired with a requirement that municipalities move local transport to tendered service contracts. Routes the local electorate genuinely wants are retained and funded transparently from local budgets; the open-ended central top-up disappears.
Affected groups
Local public-transport operators and their employees; riders on routes that survive only because the deficit is centrally covered; municipalities re-procuring transport.
Free Society Institute
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