Insufficient financing is a longstanding problem bedevilling local and regional authorities, which face great problems again, seeing as January and February proceeds from their share of income taxes were significantly lower in comparison to those of 2024, President of the Slovak Towns and Villages Association (ZMOS) Jozef Božik warned on Tuesday.
Božik conceded that ZMOS saw a proportion of the money lost after the financing of nursery schools was transferred to the state. He pointed, however, to several problems the ZMOS will face this year. "The first and most fundamental one is how to deal with the month of May, when a steep drop in our share of income tax proceeds is expected. They say the available sum will be only €26 million, which would mean about €5 per capita, a sum that is very, very low," quantified Božik.
Because of this, ZMOS is in talks with the Finance Ministry.
We're talking openly about a tax mix that would consist not only of personal income tax revenue, but also of corporate income tax revenue, as well as a share of value added tax (VAT) revenue. ... We need to create a system so that if by chance some representation decides to adjust the personal income tax yield, there will be other compensatory mechanisms and we won't have to regularly beg, sometimes it is almost undignified, to be paid €10, 20, 30 or 50 million," said Božik.
Božik pointed out that local authorities still lose a lot of money due to a hike in the tax bonus for parents with children from a few years ago. In the previous years, however, the ZMOS always managed to negotiate with the government compensation in the form of participation in the proceeds from collection of income tax from legal entities. That is no longer the case this year, however, with the local authorities losing more than €300 million as a result.
The ZMOS president underlined that, unlike the government, local authorities can't operate with a budgetary deficit.
He pointed out that several towns and villages are already laying off employees and introducing additional consolidation measures, all of which will translate into fewer and more limited public services.
ZMOS members plan to draft their own set of measures to modernise the operation of local authorities and submit it to public discussion. "It is precisely because we're aware that if we're going to consolidate for the next four years, and everything points to the fact that we will need to consolidate, then it's about high time to have a fair discussion on what public services should be provided by the state, regions and towns and villages," said Božik.
Source: TASR
