Bulgaria's Local Authorities to Resist 15% Cut of State Subsidy

NAMRB Chair Dora Yankova (right) insists that PM Borisov (left) has committed not to cut the state subsidy for municipalities by more than 10%. Photo by BGNES

The Bulgarian government intends to reduce the planned state subsidy for the municipalities by 15%, according to draft act for revising the 2010 state budget.

“We had agreed with Prime Minister Boyko Borisov a cut of 10% year-on-year, and now we are surprised to learn that the reduction will be 15%. The local authorities are not going to accept that, we will be meeting with the government,” stated Dora Yankova, Mayor of Smolyan and Chair of the National Association of Municipalities in the Republic of Bulgaria (NAMRB).

Originally, the Bulgarian government wanted to cut the subsidy for the local authorities by 20% - or by BGN 182 M. However, it revised its decision to a 10% cut after the energetic protests of the mayors from around the country.

If the government’s new plan to cut the subsidy by 15% materializes, this will mean saving BGN 138 M from the state budget.

The draft state budget amendment law bans the government from cutting the municipal money for education, social projects, security and defense, as well as environmental projects which have already been approved.

The mayors are reacting strongly over concerns that the subsidy cut will affect the ability of the municipalities to provide communal services and to pay their dues to businesses over public procurement projects.

The NAMRB Chair Dora Yankova is positive that the municipalities will insist that the government keep its word for a 10% cut.

She has also pointed out that the reduction of the state subsidy in general will require laying off 4 500 municipal employees, which will affect the capacity of the local authorities to handle their responsibilities.

“Many municipalities are giving up applying for EU funding because the preparation of a project application – especially with respect to infrastructure – is connected with preliminary costs such as the expropriation of private lands,” Yankova said expressing her concern about the effect of the government austerity measures.

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