By Oscar Antezana, El Dia:

A hospital without medicines. A road riddled with potholes. An official who responds: “There is no budget; we must ask La Paz for resources.” This experience explains the appeal of Rodrigo Paz’s 50/50 proposal: managing more money closer to the people so their problems can be solved. But what exactly would be divided equally? To understand that, we must first look at how resources are currently distributed.

Since the Popular Participation Law of 1994, Bolivia has shared revenue from certain national taxes, including VAT and the Corporate Income Tax. Out of every 100 bolivianos in this pool, 75 go to the central government, 20 to municipalities, and five to universities. The basic framework remained in place under the 2010 autonomy legislation. Departmental governments do not participate in this pool, but they receive royalties, the Direct Tax on Hydrocarbons (IDH), the Special Tax on Hydrocarbons and their Derivatives (IEHD), and other revenues. The debate is about how to expand their resources and decision-making powers.

In April 2025, Paz pledged that half of state resources would go to the regions and announced that a measure would be introduced the day after he took office. In July, he spoke of greater departmental responsibilities and moving toward federalism within ten to fifteen years. His platform included municipalities and universities, although it did not fully specify which revenues would be redistributed or how much each group would receive.

Santa Cruz has put forward formulas to make this redistribution a reality. Its Departmental Government proposes starting with 5% for the nine departmental governments and gradually increasing that share to 15%; raising the municipalities’ share to 28% and the universities’ to 6–7%. The central government would retain 50–51%. This would involve changing how the same pool of tax revenue is distributed.

The Pro Santa Cruz Civic Committee also supports starting with at least 5%, although its long-standing formula proposes a different allocation: 50% for the central government, 25% for municipalities, 18% for departmental governments, and 7% for universities. Both the 18% proposed by the Committee and the 15% proposed by the Departmental Government would apply to all departmental governments, not exclusively to Santa Cruz.

In response to these proposals, the government is offering an initial 1% for the nine departmental governments starting in 2027, with the possibility of increasing it to 15% or 18%, while maintaining the existing municipal and university shares. This revenue would be added to their other sources of funding.

So, has Paz reduced his 50% promise to just 1%?

That comparison is misleading: he promised a broad redistribution benefiting several recipients, whereas the 1% is an initial offer specifically for departmental governments. Nevertheless, the 1%, the 15% departmental share proposed by the Departmental Government, and the 18% put forward by the Civic Committee all refer to the same pool of revenue. What remains to be explained is how and when the promised allocation would be achieved.

Before asking for new taxes or declaring that there is no money for the regions, the government must demonstrate how much it can save and which expenditures it will stop financing. Those savings would help it transfer a larger share of tax revenue; they would not constitute a separate pool from which to calculate the percentages.

To achieve this change, Santa Cruz needs to turn its proposals into nationwide support. If it insists that “we produce more and want to keep what is ours,” other departments will fear losing resources. Such resistance would make it easier for the central government to block the reform. A smarter strategy would guarantee resources for territories with less capacity to generate revenue and establish a transition with clear deadlines, funded responsibilities, and oversight mechanisms. Santa Cruz will achieve greater autonomy when other departments see an opportunity of their own in supporting it.