Võru County municipalities say they are worried about the future, principally about the unresolved question of how to boost the salary funds for people operating in the county at the expense of the decreasing municipal revenue bases and growing expenses, while also being able to pay soaring energy bills.
In an address to the state, the heads of the five municipalities located in Võru County, in the far southeast of Estonia, commended the government for boosting the wages of key sector workers, for example, teachers.
At the same time, they draw attention to the fact that in the light of teacher salary increases, other educational and cultural workers who are on local government payrolls also expect a higher monthly wage, which in turn puts municipal budgets under still greater pressure.
Mayor of Võru City Anti Allas (SDE) said: "After all, we have kindergarten teachers, teaching assistants, plus all special education schools' teachers on the municipal payroll."
"In fact, everyone is awaiting this wage increase, but for municipalities the issue is this - we would very much like to meet these rises, but revenues of municipalities physically will not rise by 20 percent or more next year," he went on.
Allas added that the current economic situation does not translate into a good effect on the local governments' revenue bases either.
Public consumption has changed during the crisis, and many companies are struggling to hire workers, while at the same time unemployment also shows a growing trend in the region; Allas noted that in general, most local governments nationwide cannot contend with wage-energy price inflation on their own
"In short, we shouldn't really leave the municipalities by themselves; we just don't have the resources today. How we can keep up with this wage increase, that is today's question," Allas continued.
In this way, local governments expect the state to come out with additional aid packages.
Minister of Public Administration Riina Solman (Isamaa) says that while the concern regarding income tax receipts is understandable, according to forecast data, income tax should still be added to local government budgets next year.
Solman said: "According to the forecasts, in 2023 the income tax of local governments will increase by €160 million."
"This will then include 50 million additional income tax received from the salary increase of teachers and groups of employees who receive salaries from the state budget."
"That this will probably be an initial relief for the salary increase of kindergarten teachers and other educational and cultural workers of local governments," Solman went on,"
At the same time, according to Solman, for example, the number of taxpayers in Võru is following a downward trend, and what Allas had stated should not be underestimated in any way.
Therefore, the projected increase in income tax collection alone is not enough.
In this way, Solman proposed to the Ministry of Economy and Communications yesterday that the universal electricity service also be extended to municipalities and their institutions.
"Local governments have now spent a total of €51.6 million towards the energy costs of buildings and infrastructure in these seven months of this year, which is 50 percent more than last year at the same time,"
"And that is why I find that since these service prices are not getting cheaper when buying electricity then municipalities could actually also get a share in the universal service, the universally-priced electricity," Solman said.
Whether municipalities can be aided via any measures in the future can be observed going forward, the minister added. The two measures mentioned above are perhaps the fastest means of redress at present, the minister said.
Editor: Andrew Whyte