Several Budapest district mayors have accused Mayor Gergely Karácsony of negotiating over their parking revenues without their involvement, as the government and the capital seek a deal to keep Budapest financially operational. A deal has now been reached, under which the capital will take over the collection of parking revenues and receive HUF 120 billion in one-off government support.
District mayors object to proposed parking revenue changes
Tensions have erupted between Budapest Mayor Gergely Karácsony and several district mayors ahead of Thursday’s meeting of the Capital Development Council (FKT), the forum for negotiations between the Hungarian government and Budapest.
The dispute centres on a proposal that would transfer parking revenues currently collected by Budapest’s districts to the capital. The measure is being discussed as part of efforts to address Budapest’s difficult financial position.
Ferencváros Mayor Krisztina Baranyi, Józsefváros Mayor András Pikó, Terézváros Mayor Tamás Soproni, Erzsébetváros Mayor Péter Niedermüller and Zugló Mayor András Rózsa held a press conference on Thursday morning to object to the proposal.
Baranyi, who is also a member of the FKT, said she would ask the council to remove the parking-related proposal from its agenda. The mayors said they had not been adequately involved in the negotiations between the capital and the government, despite the proposal directly affecting their municipalities.
“Is this what the transformation means?”
Karácsony arrived at the reopening of the renovated Madách Imre Road shortly after the mayors’ press conference, where he was confronted with questions about the parking proposal.
Zugló Mayor András Rózsa asked: “Parking?” Karácsony said there was a proposal concerning the restructuring of parking arrangements, prompting Baranyi to question whether “restructuring” was simply a euphemism for taking the revenues away from the districts.
Baranyi then asked Karácsony whether he supported the proposal. “We will discuss it,” the mayor replied.
Baranyi subsequently raised concerns about the capital taking over parking operations, referring to Budapest’s previous experience with the former Centrum parking company.
“Is this so important that you would betray the districts for HUF 10 billion?” Baranyi asked, according to Telex.
Karácsony did not immediately give a substantive response. The figure of around HUF 10 billion (EUR 27.2 million) refers to the parking-related revenue at the centre of the dispute.
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Mayors threaten to suspend cooperation with Karácsony
Pikó said the districts had learned about the proposed arrangement without being properly consulted. He argued that the situation undermined the principle of local self-government, particularly because districts would lose a significant source of revenue while continuing to face their existing responsibilities.
Pikó also announced that the affected mayors would suspend their membership of the Association of Budapest Local Governments, led by Karácsony, until the dispute was resolved. He said they could consider leaving the organisation altogether if no satisfactory solution was reached.
The district mayors have also argued that they have taken on costly responsibilities from the capital in recent years to help ease its financial burden. Rózsa said parking revenues are used in Zugló for services including the operation of its public CCTV system and school prevention programmes.
Soproni, meanwhile, said Karácsony had not acted fairly by reaching an agreement with the government “over the heads” of the districts.
Karácsony and Vitézy stress the importance of cooperation
Speaking at the Madách Imre Road reopening, Karácsony thanked the district mayors for their “honesty” and said disagreements could ultimately lead to constructive results.
Transport and Investment Minister Dávid Vitézy also attended the event and stressed the importance of dialogue between the government and Budapest. According to Vitézy, the purpose of negotiations between the capital and the government is to ensure that Budapest remains operational.
The FKT was recently re-established following legislation adopted by parliament. The body is jointly led by Prime Minister Péter Magyar and Karácsony and is intended to make decisions unanimously on major Budapest development issues.
Deal reached: Budapest to take over parking revenues
The dispute took a new turn after the FKT meeting, with Karácsony announcing that Budapest and the government had reached an agreement on the capital’s finances.
Under the deal, the government will provide Budapest with a one-off HUF 120 billion in support and withdraw previous lawsuits it had filed against the capital, according to Telex. Karácsony said the funding would allow Budapest to pay its solidarity contribution, settle certain debts and, despite the difficulties, close the year without running out of money.
The agreement also includes a reduction in the solidarity contribution, although the exact amount applicable to Budapest will only become clear once an agreement has been concluded with all municipalities. In return, the capital has committed to making HUF 20 billion in operating-cost savings in 2027.
Karácsony also said the agreement would involve the creation of a regional BKK system covering Budapest and its agglomeration. Under the proposed model, the state and the capital would jointly make decisions about the operation of the transport system and would finance it on an equal basis.
The parking dispute was also settled as part of the agreement. Karácsony announced that the capital would now organise parking across Budapest and collect the resulting revenues, rather than the money remaining with the individual districts. He argued that a unified system could be operated more efficiently and said the capital would establish a Budapest road fund using the parking revenues.
Karácsony said the change was justified in part by the capital’s responsibility for Budapest’s road management, while the districts currently receive the parking revenues. He also argued that parking is operating with an unsatisfactory profitability rate and that a unified system could reduce operating costs.
The agreement was reached despite the objections raised by the district mayors earlier on Thursday. The mayors had argued that the parking revenues were essential to financing services in their districts and objected to the negotiations being conducted without their involvement. Karácsony said he remained open to discussions with the district mayors over the changes.
hehehehehe
A Commie whines about unjust distribution of wealth. Then, the first chance he gets, he hogs it all for himself.
Whodda seen it comin’!