Local municipalities with financial problems face difficult choices

Gathering in support of rural libraries in Rõuge municipality.
Gathering in support of rural libraries in Rõuge municipality. Source: Mirjam Mõttus/ERR

Local governments in Estonia have began reducing the number of educational and cultural facilities and other services, ERR's weekly "AK" reports. In certain instances, municipal budgets have been strained as a result of poor decision-making, but more generally due of the nation's falling population, dwindling earnings and growing inflation. More than ever, local communities fear marginalization.

Rõuge is one of 10 municipalities in a precarious financial situation. Following the administrative reform, it started to deliver on its promises straight away, without implementing any cost-cutting measures. Instead, the municipality borrowed more than €6 million to meet its obligations.

Add to that the repayment of €300,000 in European project funds, the reduction in income tax, and price increases and the municipality is on the verge of bankruptcy and must find immediate cost saving solutions.

The mayor of the municipality, Britt Vahter, stated that everything is falling like dominoes. The council has already decided to combine the management of cultural institutions and libraries. Next, a choice must be made regarding the local school network. "Is it also going to be centralized, with the third grade removed from one of the schools? Is this really enough?"

"Our entire infrastructure is out of date. We have no reserves in case something happens, such as a school or subdivision heater breaking down and, speaking from this angle, I am not sure how much saving is enough," Vahter said.

The mayor said that merging two of the municipality's four schools would have made sense: "However, unfortunately, this proposal received no political support or consensus," he added.

In fact, many municipalities in Estonia are currently consolidating their educational networks. In the Põlva municipality the Kauksi village school, with 23 pupils, is under discussion for closure. The Lääneranna  municipality in Pärnu County, the Põhja-Sakala municipality in Viljandi County and the Võru municipality in Võru County are considering taking action.

More than 50 percent of municipal budgets are allocated to education, while the number of students is drastically declining.

Municipalities assert unequivocally that traditional service delivery methods are no longer viable. Vahter explained that each school in a municipality must have at least 30 students in each grade level in order to be eligible for state funding. However, three of the four schools in the Rõuge municipality have fewer students.

"There is a national limit of 24 students per basic school classroom. However, some of our classes have only one student and others have two. Is there a lower limit?" Vahter asked.

"Our educational network cannot be sustained and we need to restructure. As the number of children has decreased so dramatically since the administrative reform, we are unable to manage a network of the same size as before," he said.

Locals fear total marginalization

Reforms are made more difficult by the reaction of locals, who believe that the intention is to utterly marginalize municipalities.

They have began protesting and advocating for the remaining services in the region.  For example, the people of Mõniste in the municipality of Rõuge are reluctant to accept that their basic school, which has 45 students, should be converted into a one-to-six-grade school.

"It is still vital for our community to have access to education near to home," Indrek Vsu, a father of four, said.

"Children should not be the first target of our reform efforts," Kadi Mõttus, a teacher at Mõniste school and mother of three, added.

"The entire process needs better planning and consideration. At the moment, it is being done in a bit of a hurry," Üllart Länik, vice-chair of the Mõniste school board of trustees and father of three, said.

Counselor for the municipalities: resolution of the problem has been delayed

Ministry of Finance reported the population in the majority of Estonia's remote areas has decreased by up to 20 percent and the number of students has decreased by more than 50 percent over the years.

"This necessitates a reorganization of services, and if this has not been done over the years, it must be done immediately in a circumstance where all other spending has increased," Kaia Sarnet, deputy secretary general for regional affairs at the ministry of finance, said.

Municipal advisor and Geomedia consultant Rivo Noorkõiv said that the situation in which municipalities find themselves did not occur overnight, and that the problem has been postponed due to incompetence of local authorities.

"Administrative reform has not yet permeated the public consciousness, nor has it reached the representatives' attention," Vahter said. "We are still living in a pre-reform era, where we have the previous five municipalities and each commissioner of a single region still only represents the interests of his or her own region, making effective negotiation impossible," he added.

Simply put, there are municipalities where the population is declining and fewer services can be provided, and municipalities where the population is increasing but services such as nursery spaces are in short supply.

"The hardest hit are still municipalities without a defined network of centers, the vast decentralized areas with few inhabitants, where services tend to become more distant," Noorkõiv said.

"With 933 square kilometers of land and 5,000 people, how realistic is it to provide the same services as in Viimsi?" Vahter said, adding that current state funding for local authorities was no longer valid and should be reviewed as a matter of urgency.

The redistribution fund must be reevaluated quickly, as it is no longer scoring the goal.

"Since municipalities are so diverse, a rural municipality with a very vast territory in a decentralized community is neither covered nor supported by the redistribution fund," Vahter said.

Sarnet said that the money in the fund has risen by almost 45 percent in the last ten years; at the same time, the money for road maintenance has remained unchanged for ten years. She agreed that the government was unlikely to be able to go on with the old way of doing things with municipalities.

"In the Nordic countries, there is already talk of beginning to distinguish between regions, so that some of the larger municipalities will do more for the smaller ones. And possibly highly decentralized communities would not be required to provide all services that are available elsewhere. This is, however, a forum for political discussion and decisions," Sarnet said.


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Editor: Kristina Kersa

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