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International Internet Magazine. Baltic States news & analytics Saturday, 28.11.2020, 13:08

Riga City Council looking for ways to save EUR 20 mln in next year's municipal budget

BC, Riga , 10.11.2020.Print version
Due to the reduction of the personal income tax revenue allocation to local governments, next year's Riga municipal budget must be consolidated by EUR 20 mln, Riga Mayor Martins Stakis (For Development) told Latvian Television this morning, cites LETA.

The mayor explained that work on the municipal budget has just begun, and that all figures and guidelines have been sent to the departments.


"These 20 mln euros are needed for us to have a zero budget deficit and avoid cutting salaries," the politician said.


According to Stakis, it will now be assessed what can be postponed, what is unnecessary, as well as inefficient spending.


For example, savings can be seen on the side of the municipal public transportatiomn company Rigas Satiksme - both in relation to e-ticket system, "which was inflated and expensive", and on the "inflated subsidies for minibuses."


However, some savings were found in each department and Stakis admitted that some decisions could also be unpopular.


"We are going through every position right now and looking at what we can do. This does not mean that we will not increase funding for anything," said Stakis, adding that the priorities are social workers, education and pre-schools, infrastructure projects, where funding will be increased.


As reported, the Finance Ministry has proposed to change the distribution of personal income tax between the state and local government budget. At present local governments receive 80% of personal income tax, while the remaining 20% are paid into the state budget. The Finance Ministry has proposed to change this distribution ratio to 75% and 25%.


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