Mayors of major cities in Romania accused the Ministry of Finance and the Government of under-financing local authorities in 2019, as only 45-50% of the income tax paid by residents of their cities will return to the municipalities’ budgets, compared to 60% required to compensate the income tax reduction from 16% to 10% in January 2018.

Bucharest mayor Gabriela Firea, once a top leader of the senior ruling Social Democratic Party now critical to the party’s leadership, is among the mayors unhappy with the new budget. But the mayors of the opposition parties were particularly vocal.

Because of the lower share of revenues earmarked for local administrations, municipalities will lose some EUR 1 billion of their budgets, according to Oradea mayor Ilie Bolojan, quoted by local Hotnews.ro.

The municipalities’ budgets were cut by some 10% under the austerity measures taken by the Emil Boc Government in 2010, under extreme critical economic circumstances, while now their budgets are cut by 40%, despite the robust economic growth, Bolojan argued. Furthermore, the payrolls increased as a result of the Government increasing the wages in the public administration and increasing the minimum statutory wage as well, which leaves even fewer funds for investments, he complained.

editor@romania-insider.com

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