Tartu opposition councilors agree public sector wages must rise

Tartu's Town Hall.
Tartu's Town Hall. Source: Ken Mürk/ERR

Opposition parties in Tartu have expressed concern over the city's 2023 budget, and say that lower-paid city workers' wages will not grow fast enough.

The opposition councilors have also drawn attention to the large-scale borrowing incorporated in the 2023 budget, announced this week.

The ruling coalition in Tartu consists of Reform, the Social Democrats (SDE) and Isamaa, while Eesti 200, the Conservative People's Party of Estonia (EKRE) and the Center Party are in opposition in Estonia's second city.

Eesti 200 council group leader Kristina Kallas said: "This dearth of salary growth is a concern. Salaries at institutions managed by Tartu City Government will not be able to keep up with inflation. This is, in my opinion, the biggest concern regarding this budget, namely that city's employees' wages will remain low."

Kallas noted there are people with full-time jobs on the city's payroll, in the social welfare and transport management areas mainly, whose before-tax monthly take-home pay is still less than a thousand euros. "This is certainly not a dignified situation, and I think that the city of Tartu should make it a goal that none of the people on its payroll make less than one thousand euros per month gross, in a full-time post."

Kallas also referred to a demonstration scheduled for December 5, where those cultural institutions' employees who are on the Tartu city budget will demonstrate for a pay rise. On the same topic, she stressed that these workers' wages are considerably lower than employees of state institutions who are working in the same field, which, Kallas says, is a matter of long-term management of Tartu's budget.

Kristina Kallas. Source: Siim Lõvi/ERR

Ongoing development at the new Downtown Cultural Center (SÜKU) project will erode any scope for salary increases in that very cultural sphere, however, Kallas said.

"In my view, SÜKU is simply too expensive and too large of a project for Tartu, and it will totally drain the budget for the next 10 years. This makes it a particularly very bad plan, and SÜKU should be reduced to more modest dimensions, so that the City of Tartu can build it and also actually maintain it," said Kallas.

Conservative People's Party (EKRE) Tartu city council chair Silver Kuusik also emphasized the need for a salary increase for cultural workers. "People who have worked hard through their lives and gained in experience should simply not treated like this. I think that we should still see to it that we can retain our specialists," he said.

The loan raises doubts

Kuusik said that the proposed large-scale borrowing stands out most of all from the budget plan, but if it is taken on during difficult economic times, that may be no bad thing. 

"Fundamentally, this kind of counter-[economic] cyclical activity has been done before, and it subsequently transpires that those municipalities or states that have acted in this way done the right thing. In that sense, I basically approve of [borrowing]," Kuusik told ERR.

It was more the end points to which the loans were directed that he took issue with, concurring with Kristina Kallas about the SÜKU center at least.

"However, objects towards the loans will be directed are controversial," he went on.

"The fact that they are being used for educational institutions is, in my opinion, highly commendable, but the fact that, for example, starting to build a cultural center (SÜKU) in the heart of the city, and especially at a time of increased prices, is a matter of dispute. I would like to agree," added Kuusik.

SIlver Kuusik Source: Siim Lõvi /ERR

Chair of the Center Party's council group, Jaan Toots, too, highlighted the issue of borrowing and salaries, saying: "We are a little perplexed that such a large loan is being taken now, at a time of general interest rate rises."

"We should have taken the loans in succession, one after another. We have started many construction projects, and of course they will have to be completed, but €51.8 million is quite a substantial additional burden; we owe €98 million anyway, so it's a bit disturbing."

Regarding borrowing, Kristina Kallas also drew attention to he city's debt burden having risen tp more than 60 percent of net revenues, which was the previous maximum permissible debt burden for municipalities in Estonia.

However, this limit was upped to 80 percent during the Covid pandemic.

Kallas said: "Since in the future, taking out a loan in the proper manner will be needed for SÜKU, this is a bit of a concern - this increase in the loan burden ahead of time."

Kallas qualified her words by saying: "In general, of course, I can understand the principle that it is actually very reasonable to borrow against the economic cycle and proceed with the construction of roads and school buildings as it is."

EKRE: how does the city plan to safeguard its residents?

Silver Kuusik also said that the 2023 budget planned for Tartu does not pay enough attention to preparing for possible crises, and the defense of the city's populace.

"At a time when the prime minister likes to talk as if we are at war, then it is clear that we may also perceive a threat of war. However, we do not find a single line in the city's budget, for example, towards building or restoring shelters."

There are in fact only two suitable places for public refuge in the event of an attack in the entire district of Annelinn, where one third of Tartuvians live.

"I can barely imagine how these good fellow citizens will fare there, should something go wrong," Kuusik added.

In addition, an error in the source data used in compiling the draft budget, if it relies on the level of inflation predicted by the Bank of Estonia and the Ministry of Finance. "I believe that inflation will be significantly higher than predicted in the data used," Kuusik added.

Toots: City officials' salaries should be pegged to the city's median wage

Center Party city council whip Jaan Toots also criticized a rise in civil servants' pay of 9-11 percent, at a time when there are all ready too many of them working, in his view.

Toots said: "The civil service is already large; it could be cut down. However they don't do that, while at the same time they want to hike [bureaucrats'] salaries by nine to eleven percent. I'm not talking about teachers or social workers – that is indeed an issue; I'm talking about those who just sit in their office. A rise for these people at this time is not right."

The leader of Tartu's Center Party faction said that while city council members' and officials' pay was recently tied to the average salary nationwide, it would have been better to have tied it to the median wage in Tartu alone.

"We linked the city managers' salary to the Estonian average. But that was not correct, it could have been linked to Tartu's median salary, then everything would be correct. If the people of Tartu are doing well, the management is also doing well, that is our position," said Toots.

Kuusik: How can the city increase the number of taxpayers?

EKRE party group chair Kuusik also said that, as per the budget, the city's population will increase by 2,500 people, most likely as the result of refugees fleeing the war in Ukraine arriving, while at the same time the number of taxpayers in the city will not increase as a result - the population of the city and surrounding municipalities merely rises..

The budget also fails to include measures aimed at increase the number of taxpayers in the city.

"Looking at this budget, we cannot not see a single entry on how the number of taxpayers could be increased in the city. The fact that we are trying to distribute benefits earned by our taxpayers to the needy is appreciable, but we should not forget our own people," he said.

The 2023 Tartu city budget envisages a rise in revenues of 8.6 percent and of expenses of 11.2 percent, while at the same time the volume of new loans taken on through the year will triple compared with 2021's figure.

The city government has budgeted €210.5 million towards the city's core activities in 2023, €208.5 million on expenses, and €51 million towards loan obligations.


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Editor: Andrew Whyte, Mait Ots

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