Nearly 5-million-euro hole in Balvi district budget

"Structural reforms" are being planned in the municipality of Balvi region to balance the budget, which lacks several million euros, the head of the municipality Sergejs Maksimovs (Latgale party) told the LETA news agency January 23.

At the end of last week, councillors of the Balvi municipality from the Green Party of Latvia, Sandra Kindzule and Jānis Trupovnieks, announced that 4.8 million euros were missing to ensure the basic functions of the municipality. Trupovnieks himself had previously been the chairman of the Balvi district, but in the last municipal elections he lost out to the list led by Maksimov.

The members of the Green Party claim that their recommendations to the council's leadership have not been taken into account for two years, so they "do not take any responsibility for the situation and will only support those reforms that will be carefully weighed and based on figures and facts". 

According to the members of the Green Party, "unprofessional behavior" is to blame.

Maksimovs admitted that the county's financial situation is difficult – he said he had talked to the deputies about the need for structural reforms, but "wasn't heard". Now, after hearing the figure of 4.8 million euros missing in the budget, there is said to be shock, which will perhaps "wake up the members of the council".

The chairman of the council estimates that "structural reforms" will mean extensive austerity measures – starting with school reform and ending with the heads of parish administrations. With the funds available to the municipality, it is unable to maintain the current structure and management principles. "If we want to continue living as before, we need an additional 4.8 million euros," Maksimov agreed with his colleagues.

Personal income tax revenues, which make up the largest part of the municipality's income, have decreased due to the increase of the tax-free minimum wage, which is currently 500 euros, Maksimovs said. This is especially felt in those municipalities where salaries are low, said the head of Balvi municipality.

Two schools have been closed in the municipality and it will be necessary to close more because "it is economically unviable to keep small schools". A decision has been made to close the Medneva kindergarten, where there are "five children and six employees". Likewise, Viduči elementary school will be liquidated on July 31. A merger of the music and art schools is also being considered.

Green Party MPs are said to have been against the closing of small schools, which Maksimov calls populism. "There will be elections soon, and everyone wants to be [seen to be] good," the chairman of the council said, adding that financial flows might be balanced within two to three months.

The municipality is also considering applying for a loan from the state, because currently there are such possibilities - the municipality's liabilities are 7.7% of the basic budget revenues, which is below the limit set by the Ministry of Finance.

Discussions on the municipal budget and the necessary reforms in the Finance Committee began last Thursday and will continue this week. All 15 council members are on the finance committee.

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