The budget strategy covers the period 2020-2023, BNS reports.

"The financial plan or the city's budget strategy for four years issues quite concrete guidelines for the city's development for the next few years and supports the balanced development of the areas of activity of the city," said Tallinn mayor Mihhail Kõlvart (Centre).

"With the activities and measures planned for the strategy period, we will ensure the city's development while also preserving a financial stability that supports development," he added.

Tax revenues account for the majority of the city's revenue, with its share ranging from 65 percent to 72 percent, BNS reports. The largest source of revenue for the city is personal income tax, which makes up 60 to 70 percent of the total.

Mayor Kõlvart said education, road and street maintenance, public transport and social welfare continue to be the areas with the highest expenditure.

"More attention than before will be paid in the new budget strategy to the general maintenance of the city, including street cleaning and more efficient snow removal. We will allocate more resources to maintain a high standard of upkeep in Tallinn, in addition to also maintaining the roads with regard to street lighting, parks and playgrounds, landscaping, decorations and more," he continued.

The city's investment volume is to remain between €127-161 million per year. The restructuring of the network of educational institutions will continue, and within this framework the renovation of the city's kindergartens, school buildings and hobby schools will also come.

Children's playgrounds and sports fields will be established and updated, and family playgrounds will also be adapted for children with special needs, under the terms of the strategy.

"Of course, we will also contribute to the reconstruction and maintenance of the city's roads and streets, and continue to improve the public transport route network and renew the fleet of public transport vehicles," the mayor said. "Preparations will also be made for the establishment of the tram route between the Ülemiste terminal and Old Town Harbor," he added.

City budget strategy must-haves

It must also be ensured that the city's long-term financial objectives are met during the budget strategy period, according to BNS.

The budget's projected operating profit must be in the black each year, at least to the extent that it covers the repayments of the principal portion of the city's debt liabilities and interest expenses.

The result will increase from €85 million planned for 2019 to €107 million by the end of 2023, which will cover both loan servicing costs and part of the investment needed to support the city's development.

"A necessary liquidity buffer is also planned for the strategy period that should provide coverage for at least two weeks' worth of the city's spending; we have planned at least €50 million a year for this, although the city's two-week spending is around €30 million," Kolvart said.

During the strategy period, operating expenses will be below operating income - the city's operating income will grow by 19.3 percent, and operating expenses by 18.4 percent.

The budget strategy foresees an annual increase in the volume of the city budget, mainly due to the increase in the income tax revenue, the number of taxpayers as well as the average salary.

By the end of the period covered by the strategy, the city's debt burden will be 37.2 percent of net income. The legally allowed debt burden level is up to 60 percent of net income.

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