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Governments are short of money. “I call it a survival budget”

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Local governments do not have funds for repairs, for roads, for culture, for education, for sports. In Aleksandrów Łódzki, for example, PLN 20 million is missing. It’s not just a problem there.

Patching holes in local government budgets is now an Olympic discipline, because escaping bankruptcy is a marathon that has been going on for four years. – Since 2019, we have been deprived of this income successively, and the last year, i.e. the introduction of the Polish Deal, was actually a reduction of our finances without any compensation – says Jacek Lipiński, mayor of Aleksandrów Łódzki.

The authorities of Aleksandrów Łódzki calculated that the city should get about PLN 80 million from the PIT tax for its operations, but it got half, which means that the budget also has only until August plus PLN 20 million in debt. – Local governments are constantly robbed of funds, we have less and less of this tax deduction. No one compensates us for this – explains Hanna Beda from the Department of Education, Culture and Sport of the Municipal Office in Aleksandrów Łódzki.

When you have to spend a fortune to maintain the activities of municipal institutions, there is no question of investments. There is no money for renovations, new water supply or roads, for culture, education or sport. – Children from the entire commune could use the ice rink, but electricity bills, plus some costs related to the modernization of the ice rink, were too high and for the first time in 12 years this year the ice rink was not open – explains Renata Papis, headmistress of Primary School No. 4 in Aleksandrów Łódzki.

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Problems with financing education, local governments are appealingTVN24

Cost cutting

Local governments have to cut costs more and more radically. EU money for KPO is needed immediately. – We are still waiting for EU funds, but will we be able to reach for them? So I do not know. Because please remember that you will need your own contribution, and with today’s state of local government finances, it will actually be very, very difficult – believes Mariusz Wołosz, Mayor of Bytom.

Last year’s commune budgets closed with a deficit of PLN 3.69 billion – this year the deficit is expected to amount to PLN 23.93 billion. Cities with county rights will face a deficit four times higher. – With such inflation as now, with this high investment cost, we will again have to resort to credits, but this cannot last indefinitely – says Mariola Szczęsna, mayor of Lwówek Śląski.

– I call it a “survival budget”. We’re supposed to get some drip again. Well, we are waiting for this drip, because we know that when a patient is in a serious condition, every drip will come in handy. They announce that this money will be available in a week’s time – adds Tadeusz Truskolaski, the mayor of Bialystok.

There’s got to be money. The Ministry of Finance stated that it had never stated that in 2023 it would provide local government units with additional funds in the amount of PLN 20 billion. The amount of PLN 20 billion was mentioned in the context of the increase in the income of local government units projected for 2024, the Ministry of Finance reported. Many local governments can’t wait for this. – The government does not save on its expenses, and does not give sufficient money to local governments, demanding that they perform tasks at the same time. This cannot be done for a long time, says Professor Witold Orłowski, an economist.

Main photo source: TVN facts

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