Reform, Social Democratic Party (SDE), Eesti 200, and Isamaa started negotiations on Sunday.

"The picture is more sour than expected. This year, we see that income tax is not coming in as quickly as in recent years. So this must be taken into account in the budget and coalition negotiations," Reinaas told ERR after Monday's discussions.

"One thing is the cost. The other is that the revenues are not coming in on a rolling basis, the costs are increasing and the city has a number of investments that need to be discussed about what can be done and what cannot be done," he added.

Reinaas said it seems the previous city government's policy was to excitedly plan investments but with little understanding of how to complete them.

The negotiators also received an overview of the planned investments.

"In broad terms, it's about building and renovating buildings, transport, improving roads. This needs to be reviewed," Reinaas said.

Solman: Investments have been neglected

Isamaa's representative Riina Solman also said the city's finances were worse than expected. She said revenue and expenditure are balanced, but there are other problems.

"The outlook is not as promising as we thought. There is no need to worry, but consolidation of the management structure and streamlining of departments must be addressed," Solman said.

She believes savings of up to 10 percent are possible.

Regarding possible local taxes, Solman noted that there is no complete consensus on them at the moment.

Pärtel-Peeter Pere (Reform) said it is quite astonishing how the city's finances have been managed. He said savings could also be made.

"The city is quite bloated. There is a lot of unnecessary duplication, very generous budgets for some institutions versus kindergartens, where this is not the case. Broadly speaking, perhaps the city could reduce administrative costs – the white-collar expenses and such, by 10 percent in the city's budget, Pere said.

Ossinovski: free public transport must continue

Jevgeni Ossinovski, a representative of SDE who was in coalition with Center before the government collapsed last week, said investments could be revised. But he said it must be taken into account that the investment plan has not been fully realized in any year.

"We know from experience that some investments will not be completed in that time, procurement will be delayed, and so on," he noted.

Speaking about public transport, Ossinovski said the reorganization of the line network, investments in new trolleys, buses and trams and tramways are being discussed.

"Free public transport should continue," he said.

The parties also discussed the transition to Estonian-language education and how Tallinn can speed up the process. Reform suggested transferring third grades to Estonian-language education this fall.

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