Budapest mayor: Orbán cabinet plans to pass on ‘severe austerity’ to local councils

The government’s 2023 draft budget would pass on the responsibility for enacting “severe austerity measures” to local councils, Gergely Karácsony, the mayor of Budapest, said on Monday, adding that the opposition parties plan to submit a package of amendments.

Karácsony told a press conference that the opposition proposals were aimed at ensuring the operability of municipalities “in these difficult times”.

It is crucial for Budapest to get the package passed, but the proposals would also ensure “important opportunities” for all localities, Karácsony said after talks with opposition representatives.

The government, he added, lacked the courage to enact the austerity measures itself.

Outlining the details of the opposition proposals, Erzsébet Gy. Németh, deputy leader of the Democratic Coalition, said localities’ “solidarity” tax should be reduced to 2019 levels, when Budapest had to pay an annual 10 billion forints (EUR 25m). In 2022, Budapest is expected to pay 36 billion forints, and 56 billion next year if the government’s draft is passed unchanged, she said.

Next year, Budapest will have to pay a much larger sum for energy as municipalities have been removed from the energy price-cap scheme, Gy. Németh said, and suggested that the electricity produced by Budapest’s waste incinerator should be used for public lighting.

Rebeka Szabó, MP of the Párbeszéd party, said the vehicle tax should be returned from central coffers to the municipalities, and localities should also be given 25 percent of the excise tax on fuels for the maintenance and resurfacing of roads. Also, the central budget should pay out 6 billion forints to Budapest for the renovation of the Chain Bridge, a sum the government had earlier pledged to contribute, she added.

Zoltán Vajda, Socialist head of parliament’s budget committee, proposed that the government and the city of Budapest should take an equal share in financing the city’s public transport, and called for funds for the city to buy new vehicles, adding that monthly public transport passes should be exempted from VAT.

Answering a question concerning an earlier proposal to introduce a fee for drivers during the rush hour, Karácsony said the city council would launch consultations with residents in September, but added that such plans were “not timely in the current situation” and he would not support such a proposal.

As we wrote before, the Hungarian government plans extremely high tax revenues – who will pay?

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