Budapest Assembly adopts measures of survival programme

The municipal assembly of Budapest at its meeting on Wednesday adopted a “survival programme”, a package of measures aimed at reining in the city’s finances.

The package includes the stabilisation of the city’s budget, maintaining the quality of city services and guaranteeing the payment of wages of people employed by institutions operated by the municipality.

Under the package approved with 18 votes in favour and 12 abstentions, the city will take out a HUF 16.6 billion (EUR 44.2m) loan for development projects scheduled for 2023. The loan will match support provided in EU funding, central budget allocations and loans granted by the European Investment Bank, according to the draft submitted for a vote.

Under the measures, the mayor of Budapest will turn to the central government for the payment of pledged compensation for increased utility costs. Budapest is the only city that “has been left out of state subsidies allocated in a first round in compensation for energy price increases to local governments of cities with more than 10,000 residents,” the draft said.

Gergely Karácsony will also submit a proposal for the city to receive one-third of the costs of operating the city’s public transport services from the 2024 central budget.

The measures also include reducing the amount payable to the central government in solidarity tax to a maximum of HUF 5 billion (EUR 13.4 million), as well as rescheduling the payment of taxes. Also, it states that the government should pay the HUF 6 billion (EUR 16 million) subsidy promised for the renovation of the Chain Bridge.

Zsolt Wintermantel, head of the group of ruling Fidesz in the municipal assembly, said “Karácsony is preparing to take austerity measures … threatening with the possibility of the city going bankrupt”. He added that Karácsony’s earlier remarks that the city would not pay its “solidarity” tax to help poor municipalities through the central budget reflected an “irresponsible attitude”.

Wintermantel said that in 2019, when Karácsony became mayor, the city had reserves amounting to HUF 214 billion (EUR 572.3 million), and received HUF 200 billion (EUR 535 million) in the local business tax. But the city has lived “from hand to mouth”, which “raises a suspicion of irresponsible management or dilettantism”. “You can list the bad decisions one by one, which Karácsony personally made and which led to the money running out,” he said.