Finance minister criticizes plan to dip into reserves for public transport funding
The plan by Minister of Regional Affairs and Agriculture Piret Hartman (SDE) to cover public transportation's funding shortfall of dozens of millions from the government's reserve next year sounds a bit reckless. It would be more prudent to see clear plans and consider reallocating funds through supplementary budgets, Finance Minister Jürgen Ligi told ERR.
Minister Piret Hartman told ERR that since the actual need for public transportation funding next year exceeds the state budget allocation by €46 million, the coalition partners have agreed to cover the shortfall from the government reserve.
"We will likely submit this request in the first half of next year. We will present the request to the Ministry of Finance with the relevant needs outlined, and the Ministry of Finance will then bring the proposal to the government," Hartman said.
Finance Minister Jürgen Ligi (Reform) noted that the government reserve is meant for unforeseen expenses. "The government reserve is not intended to finance planned and anticipated expenses," he said.
This year, nearly €20 million has already been allocated from the government reserve for public transportation. Ligi, who himself signed off on the funds as finance minister, stated that the funds were allocated because the exact amount required was uncertain at the time the state budget was drafted.
"For the past few years, public transportation has been funded both by the amount stated in the state budget and by a reserve provision. This is because the exact amount needed is uncertain, depending on factors such as fuel costs for transportation companies. That's why a reserve is allocated. But to say that we are going to cover our fixed costs from the reserve over time is certainly reckless," Ligi said.
Hartman noted that a reform of the public transportation system is underway, aiming to find areas for savings, among other things. Ligi pointed out that Hartman had already presented mobility reform plans during the previous administration, and at that time, the government was very dissatisfied with the preparation of these plans.
Ligi also said that he doesn't know what the Ministry of Regional Affairs and Agriculture means when it says there is a €46 million euro shortfall, adding that Hartman was tasked with cutting public transportation spending, as well as that someone's idea of a perfect system does not equal a standard all things are compared to. "It is a very hypothetical figure from where I'm standing."
According to the Ministry of Regional Affairs and Agriculture, €165.7 million is needed next year to fulfill obligations under existing contracts, cover infrastructure fees, and bring new trains into service (for Elron). However, the state budget for next year allocates only €119.8 million for public transportation.
Interior minister: The money will be found one way or another
Interior Minister Lauri Läänemets, a fellow party member of Hartman, said that ideally, the full amount needed for public transportation would be included in the budget. However, given limited funds, it is more practical to use the government reserve if necessary.
"This is partly a budgetary technicality – if we allocate the full amount directly in the budget, that means an additional €46 million would be required, even though we know that last year's budget surplus will go to the government reserve. This would increase the state budget by €46 million, with reserve funds added on top of that. We are currently following a strategy where, if funds are limited, we wait for these reserves to accumulate over the next year and then draw from them," Läänemets explained.
He emphasized that the full necessary funding would definitely be found.
"Since public transportation contracts are covered by agreements, they are obligations for the state. Even if a politician might wish not to fulfill them, it would go to court and the court would inevitably rule that the state must pay. These are contractual obligations taken on by the state, so the funds will undoubtedly be provided in full," Läänemets said.
Eesti 200 head: No point spending money on inefficient public transport
Prime Minister and Reform Party leader Kristen Michal stated that covering public transportation costs from the government reserve has been a longstanding practice.
"Since it's not always possible to accurately estimate transport volumes for the entire year, the shortfall is requested from the reserve. This is a similar practice to, for instance, icebreaking services and other essential services, where needs are assessed annually and the reserve is used to cover any gaps," he said.
Kristina Kallas, leader of Eesti 200 and Estonia's education minister, commented that Estonia's public transportation network does not currently meet people's needs to travel from point A to point B.
"There's no point in pouring money into an inefficient public transportation network just because someone claims there's a shortfall," Kallas remarked.
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Editor: Marcus Turovski