Municipal financing in Latvia has hit rock bottom, says expert

The system of financing local governments in Latvia has reached its lowest point, Gints Kaminskis, President of the Latvian Association of Local Governments (LPS), said in an interview with Latvian Television on February 27.

Kaminskis said that the financial situation in municipalities is not normal, because the local authorities balance budgets with difficulty. He links it to a system of municipal financing, which is now reaching its lowest point.

"Funding is actually cut and there are many more responsibilities. As a result, the real situation [..] has proven that decisions have not been correct before," Kaminskis said.

He pointed to additional compulsory responsibilities that local authorities must uptake as of late: local government police, drunk tanks, and catering issues. He believes the issue of teachers' pay should also be taken over entirely by the state. 

Kaminskis also stressed the need for stable funding in the local government equalization fund. "There must be money ahead to equalize, and then we can talk about equalization. (…) It is normal to have cohesion, just as in the European Union the richest municipalities pay the poorest. But can an equalization fund be set up by local governments alone where, for a long time, the actual share of the state hasn't changed? The country needs to come with much more, more stable funding," Kaminskis said.


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