Major shake-up planned for Hungary’s local governments if Fidesz wins in 2026

Hungary’s local government system could undergo significant changes after the next parliamentary elections if the ruling Fidesz–KDNP alliance secures another term, according to Tibor Navracsics, Minister for Public Administration and Regional Development.

Navracsics announced on social media over the weekend that the government has given him a mandate to prepare a comprehensive reform package affecting the municipal system. However, he stressed that, for now, only the preparatory phase is underway, with substantive consultations set to begin in early January.

Consultations to start in January

The minister explained that the upcoming consultation process will follow a similar model to previous government-led dialogues, such as those held for the “competitive districts” programme and the concept behind the so-called identity protection law. The talks will begin with municipal associations before expanding to a broader range of local actors.

According to Navracsics, later stages of the consultations will involve mayors, local councillors, county assembly presidents and members of county representative bodies. The aim, he said, is to collect feedback from across the local government sector before drafting any concrete legislative proposals.

Reform package promised after the elections

Navracsics made it clear that the government does not intend to submit changes before the elections. Instead, if Fidesz–KDNP wins in 2026, the ministry plans to present an overarching amendment package to Parliament afterwards.

He said the goal is to put forward a proposal that is acceptable to all stakeholders, including local governments, central government actors and the wider public. While the minister acknowledged that this is an ambitious objective, he argued that broad consultations are essential to achieving a balanced outcome.

Long-standing criticism of centralisation

According to Index, Hungary’s current local government system has been the subject of sustained criticism from municipalities in recent years. Local leaders have repeatedly raised concerns about excessive centralisation and the financial pressures caused by the solidarity contribution, a mechanism under which wealthier municipalities are required to transfer part of their revenues to the central budget.

These tensions have been particularly visible in debates over local taxation, state funding for mandatory tasks and the financial autonomy of municipalities, especially larger cities.

Key problem areas identified

In recent interviews, Navracsics has outlined three main areas that could shape the direction of the reform. These include the financing of local governments, the balance of responsibilities and powers between the state and municipalities, and the legal status and powers of mayors.

As examples, he has pointed to unresolved issues surrounding local taxes and the solidarity contribution, as well as the question of whether mandatory local tasks are adequately funded by the state. He also highlighted the financing of local public transport, noting that, outside Budapest, there is currently no dedicated state normative funding for these services.

Tightening already underway

Although the comprehensive reform is being deferred until after the elections, recent months have already seen stricter rules affecting municipalities. Measures included in the 2025 state budget introduce tighter financial and procedural controls, such as a ban on factoring, stronger data reporting obligations and mandatory treasury account management for larger state subsidies.

Navracsics also referred to the experience of the identity protection law, noting that since July, more than 100 municipalities have adopted related local decrees, around a third of which have been reviewed by government offices.

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