The Tartu city government has submitted to the city council a draft negative supplementary budget totaling €3.1 million, which represents 1.5 percent of the initial €208 million budget approved for 2020 in December 2019.
Mayor of Tartu Urmas Klaas said while the negative impact of the coronavirus crisis exceeds €10 million according to current prognoses, the volume of the supplementary budget is much smaller.
"Last year ended well for the city and a part of revenue shortfall and expenditure on curbing the virus can be covered from last year's surplus," Klaas said.
Klaas noted that due to the overall impact of the coronavirus on the economy and thereby also to the city of Tartu is not yet known, budgetary options will be reviewed in the fall after economic developments have become more pronounced.
Pursuant to the draft supplementary budget submitted to the city council, the city's incomes are to decrease by €10.1 million. The decline in tax revenue is budgeted to total €8.3 million, the lion's share of which comes from a drop in personal income tax receipts.
The budget for the sale of goods and services by institutions of the city has been reduced by €2.6 million and the budgeted sale of assets by €2.1 million. The reductions are predominantly caused by the negative economic impact of the coronavirus crisis.
The city government has implemented austerity measures and optimized its operating costs with cuts made in benefits and management costs in the total amount of €4.6 million.
Investments will be reduced by four million euros this year, the cuts primarily concern small-scale objects, which will be postponed. 2020 was planned to be a year of record-high investments at close to €40 million. Contracts have been concluded and works are underway in all major investment projects.
The supplementary budget includes the governments' support measures totaling €2.9 million, which will to a small extent cover revenue shortfall and extra expenditure caused by the coronavirus crisis.
Editor: Helen Wright