The new act is to make local governments receive 25 billion złoty more. The Polish Deal limited local governments' revenues, and the large cardboard checks handed out by the then government did not change that. Since local governments' coffers are empty, there is a government response – first a temporary measure, and then a law.
Four months before the end of the year, local governments are having to dig deeper into their pockets. – We are trying to postpone some payments until next year, this will help us close this budget – says Michał Pierończyk, the president of Ruda Śląska. – Public finances in our city are at the edge of endurance – admits Agata Wojda, the president of Kielce.
The mayor of Kielce points out that many factors contributed to this. Among others, the Polish Deal and inflation. – In the coming days, we will propose to councilors to increase the property tax rate – says Agata Wojda.
In turn, Sosnowiec has postponed the renovation of several roads and the modernization of the swimming pool. – Out of 2,400 municipalities, 1,550 are in an operating deficit, i.e. less income than needs to be spent by the end of the year – points out Andrzej Porawski from the Association of Polish Cities.
Proposals for changes to improve the situation have appeared on the horizon. The government and local government, after long negotiations, have agreed on a draft law on local government revenues. – This is a reform that benefits every local government unit in Poland, regardless of political affiliation – assures Andrzej Domański, Minister of Finance from the Civic Coalition.
This is to be the first step towards repairing local government budgets. – The direction is good because it makes local governments independent of the government – says Arkadiusz Chęciński, the president of Sosnowiec.
Financial problems of local governmentsTVN24
How much money will go to local governments?
The Minister of Finance indicates a specific amount. – Local governments will receive 25 billion zlotys more than they would have received if this project had not been implemented – informs Andrzej Domański. – The funds, as is always the case in life, (…) are not what we expected, because they do not in any way reflect what was stolen by the PiS government in previous years – admits the president of Sosnowiec.
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Minister Domański declared that an additional PLN 10 billion would be transferred to local governments this year. – All local governments will be able to count on improving their budget situation by the end of the year, because it is true that the vast majority of local governments are in a very difficult financial situation – assesses Rafał Trzaskowski, the mayor of Warsaw.
The reform is to guarantee each local government higher revenues than currently – from 4 to 10 percent. But that's not all. – If the government makes any decisions regarding tax changes, it will not affect the finances of local governments. This is also what we wanted from the very beginning – the president of Warsaw points out.
The Minister of Finance wants the reform of local government finances to come into force in January 2025.
Main image source: TVN Facts