Half of small towns in Romania lack number of inhabitants to be classified as towns, report says

A report by the Romanian Court of Accounts, conducted between April and November 2024, which analyzed the organization and functioning of communes and small towns in relation to the population served, shows that, depending on the number of inhabitants, many towns and communes no longer meet the criteria for inclusion in their respective categories.

According to the law, the minimum threshold for the establishment of towns is 10,000 inhabitants, and for communes, the threshold is 1,500 inhabitants.

“At the level of 2023, 119 towns did not meet the demographic criterion of a minimum of 10,000 inhabitants. These represent more than half (55%) of the total of 216 towns. At the same time, 432 communes (15% of the total number of communes) did not meet the respective criterion,” the report of the Court of Accounts says.

“The demographic criteria for classifying localities as towns and communes no longer correspond to current dynamics. At the same time, the lack of clear and reliable indicators, as well as the difficulties in calculating and interpreting existing ones, significantly affect the ability to evaluate localities,” the auditors emphasize.

In 2023, only 27% of communes and 34% of small towns managed to finance themselves from their own revenues in a proportion greater than 50%. However, the capacity to finance from own revenues increased year by year in the period 2021–2023, more in the case of communes than in that of small towns. The high share of personnel expenses may indicate the limitation of resources for development, the auditors point out.

The audit notes that, compared to municipalities and county councils, towns and communes face greater difficulties in attracting personnel. It also says that salaries in towns are higher than those in communes, despite similar numbers of inhabitants.

The audit notes that “dependence on state budget funding and difficulties in collecting own revenues represent major challenges” for towns and communes. “This financial dependence is accentuated by annual laws that provide exceptions, which, although they help balance budgets in the short term, may affect financial autonomy and long-term development.”

On the other hand, the document notes that the current legislative framework “does not provide the necessary tools to efficiently reorganize local administration and respond to the specific needs of communities.”

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