Romania Insider
Romanian Govt. insists rich municipalities share fiscal burden

Romanian finance minister Eugen Teodorovici claims that only the large municipalities are unhappy with the state budget draft for this year.

The mayors of Romania's largest cities, including the capital Bucharest, are unhappy that, in addition to granting them higher revenues, the Government passed them more expenses this year, which they claim has an overall negative effect on their budgets. The conflict between the city mayors and Government puts at risk the quick endorsement by the Parliament of the 2019 budget.

Teodorovici said that the Government must look after the whole country, not only the rich part. The communes and small cities have not objected to the budget planning, only the rich municipalities are not happy with the budget, he explained.

The Government will adopt the budget draft, which is “revolutionary”, Teodorovici announced, quoted by Digi24 TV station.

The mayor of Bucharest’s District 3 Robert Negoita, a leader of the ruling Social Democratic Party (PSD), recommended MPs to consult with mayors in their electoral precincts before endorsing or not the 2019 budget draft proposed by the Government.

Bucharest mayor Gabriela Firea, who is also a PSD member, went even further and warned that she considers challenging the budget planning at the Constitutional Court unless the Government reconsidered the draft. The Bucharest municipality will lose 25% of its budget under the budget planning drafted by the Government, she explained.

Indeed, the municipalities and cities saw their revenues shrinking after the Government cut the income tax rate from 16% to 10% effective January 2018 and hope to get back part of the revenues in 2019. The Government accepted to increase from 43% to 60% (versus 66% asked by municipalities) the share of income taxes left with local administration bodies in 2019, but it passed them supplementary expenditures. The social security payments passed to local administration will be made with priority, ahead of all the other expenditures, Teodorovici stressed.

Nonetheless, it is a fact that the large municipalities enjoy disproportionate wealth thanks to their economic development and to hosting large companies’ headquarters. This is how Bucharest municipality affords to subsidize more than half of the costs incurred by the inefficient public heating system, while the residents of all the other cities (including some of the largest of them) have to pay full price for their heating. Furthermore, Firea extended the range of social benefits to Bucharest residents to an unprecedented scale: from trips given to senior residents, to subsidies given for glasses or dental services given to kids and free artificial fertilization, to name only a few of them.

editor@romania-insider.com

(photo source: Gov.ro)

Normal
Romania Insider
Romanian Govt. insists rich municipalities share fiscal burden

Romanian finance minister Eugen Teodorovici claims that only the large municipalities are unhappy with the state budget draft for this year.

The mayors of Romania's largest cities, including the capital Bucharest, are unhappy that, in addition to granting them higher revenues, the Government passed them more expenses this year, which they claim has an overall negative effect on their budgets. The conflict between the city mayors and Government puts at risk the quick endorsement by the Parliament of the 2019 budget.

Teodorovici said that the Government must look after the whole country, not only the rich part. The communes and small cities have not objected to the budget planning, only the rich municipalities are not happy with the budget, he explained.

The Government will adopt the budget draft, which is “revolutionary”, Teodorovici announced, quoted by Digi24 TV station.

The mayor of Bucharest’s District 3 Robert Negoita, a leader of the ruling Social Democratic Party (PSD), recommended MPs to consult with mayors in their electoral precincts before endorsing or not the 2019 budget draft proposed by the Government.

Bucharest mayor Gabriela Firea, who is also a PSD member, went even further and warned that she considers challenging the budget planning at the Constitutional Court unless the Government reconsidered the draft. The Bucharest municipality will lose 25% of its budget under the budget planning drafted by the Government, she explained.

Indeed, the municipalities and cities saw their revenues shrinking after the Government cut the income tax rate from 16% to 10% effective January 2018 and hope to get back part of the revenues in 2019. The Government accepted to increase from 43% to 60% (versus 66% asked by municipalities) the share of income taxes left with local administration bodies in 2019, but it passed them supplementary expenditures. The social security payments passed to local administration will be made with priority, ahead of all the other expenditures, Teodorovici stressed.

Nonetheless, it is a fact that the large municipalities enjoy disproportionate wealth thanks to their economic development and to hosting large companies’ headquarters. This is how Bucharest municipality affords to subsidize more than half of the costs incurred by the inefficient public heating system, while the residents of all the other cities (including some of the largest of them) have to pay full price for their heating. Furthermore, Firea extended the range of social benefits to Bucharest residents to an unprecedented scale: from trips given to senior residents, to subsidies given for glasses or dental services given to kids and free artificial fertilization, to name only a few of them.

editor@romania-insider.com

(photo source: Gov.ro)

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