Bucharest municipality to cut planned expenditures by EUR 130 mln

Bucharest’s General Council will vote on June 26 a proposal to cut the planned (budgeted) expenditures by more than RON 600 million (EUR 130 mln), or nearly one-tenth of the budget initially set for this year, Hotnews.ro reported.

The proposal was already published on the municipality’s website and includes a significant cut in the money earmarked as heating subsidies: nearly half of the reduction (RON 288 mln) comes from lower heating subsidies spending. The heating subsidies will thus go down by 37%, which means that residents connected to the public heating system will probably have to pay more this winter.

Bucharest municipality pays for a large part of the district heating. Since it has not been able to cope with the subsidies owed to the heating supplier, the municipality borrowed this spring EUR 100 million from the State Treasury to avoid disruption in hot water supply.

The municipality explains that cutting the expenditures by some 10% was needed because the central Government lowered the share of income tax earmarked for local administrations and has not compensated this as promised. Hotnews.ro quotes a message circulated by city manager Sorin Chirita, who urges institutions under the municipality’s supervision to cut expenditures as much as possible and run investments only when urgent.

The municipality’s revenues dropped by 15% in the first five months of this year, and the drop is expected at 35% for the whole year. Under these circumstances, the 10% cut in the planned expenditures might not be the last budget revision Bucharest makes this year.

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