The courts stand up to the unprecedented Orbán-decree: Budapest and other cities may escape the squeeze – UPDATE

Hungary’s municipal system has long been riven with faults, and Budapest is hit particularly hard by the centralisation that leaves its resources barely enough to function normally. A key factor is the so‑called solidarity contribution, which has risen almost twentyfold between 2018 and 2026. As a result the capital brought a case against the state, but the government, in a late‑night decree on Tuesday, sought to end the case so it could collect the unpaid contribution. The courts, however, said no.

The courts gave the government the thumbs‑down

It appears that the legal profession is broadly united in opposing the government’s late‑night decision on Tuesday, which ordered all court cases questioning the level of the solidarity contribution to be closed immediately. Yesterday, the Budapest Metropolitan Court (Budapest Környéki Törvényszék) and the Metropolitan Court (Fővárosi Törvényszék) both ruled that they would not enforce the decree, which carried Viktor Orbán’s signature and cited a state of emergency over the war in Ukraine.

In the case of Szigetszentmiklós, the Budapest Metropolitan Court was slightly more lenient, postponing the next hearing to after the elections, on 19 May. The Metropolitan Court, by contrast, was tougher: the hearing will continue on 16 March as if nothing had happened.

Why was this precedent‑setting intervention needed?

Experts also speculate about the government’s motive in issuing the decree. Some suggest the move recognises that the courts will not side with the government over such a brutal increase in the solidarity contribution. As a result, the government pre‑empted potential precedent in other cases (while at the same time creating a precedent of their own by suspending court hearings with a single decree).

Another interpretation is that the rapid decision aimed to cash in billions of unpaid funds from Budapest before the elections, to push the city to the brink of bankruptcy. In this campaign, the ruling party is visibly concentrating on rural areas and fostering a narrative of urban–rural conflict, which suits an opposition‑led but financially insolvent capital.

What is the solidarity contribution?

The solidarity contribution was introduced in 2018 to help wealthier municipalities support the weaker parts of the country. Yet the distribution is opaque, as is the collection. This year, for example, the government collects the highest share from Csepel in Budapest’s 21st district, while it is far from the wealthiest borough in the capital.

In Budapest, both the city and the districts pay. The capital’s solidarity contribution was 5 billion forints in 2018, but by 2026 it has risen to almost 100 billion. All this despite the fact that its industrial tax revenue (the primary, almost single source it can freely use) has not grown nearly as much.

What do the lawyers say?

The legal profession appears to be broadly scandalised by the Tuesday night government decree. The president of Hungary’s Supreme Court (Kúria) said: “In the solidarity contribution cases, proceedings are still ongoing in the lower courts. In those ongoing proceedings, the judges assigned to decide must decide.” In other words, both courts mentioned above were right to indicate they would continue the cases.

The Hungarian Bar Association has also spoken out. It says the Tuesday night decree breaches:

• the separation of powers,
• legal certainty,
• access to justice,
• the right to remedy,
• judicial independence, and
• the ban on retroactive effect.

What do the government and Gergely Karácsony, Budapest’s mayor, say?

The mayor argues that the Tuesday government decree toppled within a day the solidarity contribution, according to the Hungarian state news agency MTI.

Karácsony Gergely said: “Budapest is not alone in its fight. The fact that several municipalities are suing the government over the unjust and unlawful squeezing reveals the government’s lies: it is not true that money taken from Budapest goes to small towns.” He added that, because of the financial situation, precautionary measures would continue, including delaying payments to suppliers.

Sára Botond, the city’s lord lieutenant (appointed by the government), contends that the solidarity contribution does not contravene either the Constitution or the European Charter of Local Self‑Government, a point the Constitutional Court has twice affirmed. He describes all other commentary as political messaging.

Read our previous articles concerning the complex issue:

• Bypassing the courts: Orbán cabinet uses decree to deny near-bankrupt Budapest its lawful funds
• Budapest to pay the price: How Hungary’s 2026 budget plans could further drain local governments

UPDATE: The Kúria’s clarification

According to HVG, Hungary’s Supreme Court (Kúria) has clarified that it has not taken a position against the government regarding the controversial decree affecting lawsuits over the so-called solidarity contribution. In a statement to news outlet 24.hu, the court stressed that cases currently underway must be decided by the judges assigned to them.

After 24.hu interpreted the response as criticism of the government, the Kúria issued a second statement calling that reading “groundless” and emphasising that it had not expressed any opinion on the matter. The court underlined that it can only rule once a case formally reaches it and cannot instruct lower courts in ongoing proceedings.

The dispute follows a recent government decree declaring that municipalities are not entitled to legal protection in lawsuits challenging the solidarity contribution. Both the Budapest-Capital Regional Court and the Budapest Surroundings Regional Court have raised constitutional concerns, citing judicial independence. The Kúria reiterated that, under Hungary’s Fundamental Law, judges are independent and may not be directed in their decision-making.