2024-09-18 15:20:20
- We are working for decentralization so that regional mayors have more finances, says the deputy mayor for finance, construction and health
- We are preparing a register of all municipal properties
This year, Sofia’s budget is over BGN 2.63 billion. In it, a record 500 million BGN was allocated for public transport, more money for healthcare, education and social policies. 630 million is the capital program. In addition, there is a city-wide civic budget that allocates a total of up to BGN 500,000 to finance projects proposed and chosen by people and their ideas for their neighborhoods.
The voice of the people in the capital is important for the municipality, therefore there is also a separate regional civil budget – up to BGN 200,000 for financing projects for each of the 24 districts of Sofia.
All these numbers seem impressive at first glance. But in recent years, the Metropolitan Municipality has followed a conservative tax policy and local taxes have not been raised. However, this resulted in low revenues and an extremely insufficient budget that could not meet the needs of the city’s restart.
“We are working towards
search for different sources of financing, for let’s start solving the problems,
that we face every day. One of them is green bonds (debt financial instrument, the purpose of which is to raise monetary resources and finance new or existing projects that have a positive impact on the environment and climate change – b.a.). The other is taking out new loans. I work with colleagues from all departments and expect them to present me with specific ideas and projects for funding. We are looking for different mechanisms, I talk to many banks and everywhere I see interest and willingness to finance
bolder and ready ideas for transport, green policies, infrastructure
This is our line of thinking in finance – to have ready projects, and we will find the money. The solutions that are right for Sofia are apolitical, but we want our city to develop, not to keep our mandate and sit with the same problems. Decisions have a political price and it pays,” says the Deputy Mayor for Finance, Construction and Health Ivan Vasilev.
Such an example is the project for over BGN 1 billion, with which over 500 new vehicles for urban transport will be purchased next year.
Another important topic for the municipality is financial decentralization. This implies that a share of the revenues from real estate tax and motor vehicle tax (for example, between 10 and 20%, or between BGN 20 and 40 million per year) should be unconditionally distributed to the regions based on the revenues from each region. That is
part of the money that the municipality collects from
people living in a given area to put back into it
and be used for projects that the district mayor proposes. Regions now collect money from the services they provide, as well as from renting out council property. However, these revenues immediately go to the general budget, where they are then redistributed without taking into account the contribution of each district. Local taxes and fees are collected by the tax administration of the Capital Municipality and do not remain in the regions.
“We are fighting in two directions for decentralization. First is the internal one – to give more opportunities to regional mayors to operate with financial resources. On the other hand, is the fight with the state for financial decentralization of municipalities. No minister wants to take this step because Sofia will receive a little more money than other municipalities,” explained the deputy mayor.
In the first 6 months of this year, we collected over BGN 60 million more from local taxes and fees, but this is mainly due to the increased number of transactions with public property, he announced. But over the years, over BGN 300 million have been unpaid for household waste tax and about BGN 80 million for vehicle tax. They are owed not only by companies and citizens, but also by state institutions, universities, and diplomatic services. One of the ideas that Ivan Vasilev and his team are working on is to link the use of municipal services with the payment of due fees. This was done with the annual technical inspection and vehicle tax. The other option is better work of the local administration with the National Revenue Agency and private bailiffs to collect accumulated debts.
We are considering making a municipal property register that clearly states which property belongs to whom. At the moment it is unclear. We have started working in this direction with the regional mayors and we are updating the information, but we are taking timid steps, he further explained. For him, it is important not to sell off the municipal property. We also want
to build more buildings for council housing,
which are now woefully inadequate. There are currently 7,900 municipal housing units, 99% of which are filled. 6,800 families are waiting for accommodation, but in reality they are much more. Years ago there was a sale of municipal housing for one reason or another, but against the background of the needy, Sofia owes them. And they are also a means of conducting personnel policy of the municipality. With colleagues from the municipal council, we are talking about where and how they can be built, whether it is possible to partner with private objects.
The ambition of the team is for the municipality to become an open and predictable partner for business and to solve the city’s problems together. Vassilev is categorical: “We want to open up the municipality so that businesses can identify public needs and be their partners.
But the business should be active, there should be a public-private partnership. There is also a need for legal changes, but this is the general direction in which we are working with Mayor Vasil Terziev. At the moment the municipality is a bit encapsulated, but we have already done several business councils with the big business organizations and IT”.