City Finance in Trinidad

In 1990, the Cuban government started encouraging tourism in Trinidad and opened five government restaurants and two bars, city historian and architect Nancy Benitez told us. Out of the profits from the bars, the government sent 2% to the city to maintain the homes.

Pleased with these developments, the city in 1998 developed a Master Plan to improve the city, including plans to expand room space. At that time, the government maintained only 800 rooms in the city, with an average of 3,000 visitors a year.

The Master Plan set off an explosion of entrepreneurship. Within four years, private owners opened 58 restaurants and 1,000 rooms in their homes, including the homes in which we stayed and the outdoor restaurant in which we ate. “We thought Cubans didn’t have any money to start new business,” Benitez told us. “We weren’t ready and the Master Plan was destroyed.”

To deal with the growth in tourism, Trinidad is now updating a 200-year-old water and sewer system with blue barrels to collect rainwater and hoping to build an electrical substation.

A major challenge, emphasized Benitez, is that although the government restaurants and hotels paid the city 2% of profits, the private enterprises pay taxes of 10% to the national government in Havana, none of which is returned to the city. The city bears the brunt of providing services, while the national government in Havana taxes the proceeds.

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