site.btaAssociation of Municipalities Says Adoption of 2025 Budget Is Essential for Them

Association of Municipalities Deputy Chair Donka Mihailova Monday told BTA the adoption of the 2025 state budget is essential for the municipalities  as a clear financial framework for the coming years.

She stressed that Bulgarian municipalities had been living in uncertainty for years. The situation for the leaders of the Association is very complicated as they must constantly meet new ministers and new MPs.

"What is worse, we can hardly plan long-term policies for the development of our municipalities, while people expect us to address specific problems and offer solutions. Very often in recent years, we have been the only authority that people can rely on," Mihailova said, adding that budget planning is also difficult. "It is extremely important for us that it is adopted so that we can have a clear financial framework for the coming years."

Mihailova participated in her fourth negotiation on a budget with a finance minister, and this time it was the most difficult. "The first version of the framework we received from the Finance Ministry did not plan a targeted capital subsidy altogether. We urgently requested talks with Finance Minister Lyudmila Petkova and we reached a reasonable solution," she emphasized. As a result, the  Bulgarian municipalities will have a targeted capital subsidy of BGN 454 million.

She commented that the negotiations on the investment programme were even more complicated. The programme provides financing for significant large-scale projects, such as the renovation of water supply and sewerage networks, municipal roads and streets, new sports halls, schools and kindergartens.

"Unfortunately, we ended the negotiations without getting clarity on the limits of the programme for the next two years. We managed to agree that we will receive BGN 1.12 billion in 2025," she said. Still, the municipalities got a minor increase in important expenses, such as those for snow clearing, road maintenance and public transport.

The 2025 state budget also envisages an extra BGN 500 million to be collected from a tax amnesty. In Troyan Municipality, where Mihailova is the Mayor, the tax amnesty will lead to a smaller revenue, because otherwise default interest alone brings about BGN 100,000 every year. "Troyan Municipality has a high tax compliance rate and uncollectible revenues would be difficult to collect, with or without additional measures," she said. In contrast, municipalities with a low collection rate may see an increase in revenues as a result of the tax amnesty.