2024 municipal budget must be adopted with broad political consensus, expert

Veaceslav Ioniță, expert of the Institute for Development and Social Initiatives “Viitorul”, believes that Chisinau will enter the new year without an approved budget. In his opinion, the document has not yet been approved because the Chisinau Municipal Council failed to form a coalition and did not reach a broader consensus. The 2024 budget must be a budget of a broad political consensus, focused on investments covered by new sources of revenue, IPN reports.

The expert said that the battle for the city must prevail over the political battle. “I hope that the mayor general of the municipality of Chisinau, together with the municipal group representing him, will create a broad coalition because the municipality’s budget must center on development, on investments,” noted the economist.

Veaceslav Ionita said that the central authorities marginalize Chisinau in terms of investments. Practically all money from the central level for local investments goes to localities in the country, except for Chisinau that makes investments from savings, sale of particular goods and loans.

“The municipality of Chisinau, like other localities in the country, earns most of its revenues from taxes that the state distributes locally. Local income can also be earned from leasing out particular properties. The share of local taxes decreases in Chisinau and in the rest of the country and new sources of revenue need to be identified. The development tax can be a solution. All those who erect buildings in Chisinau must pay a tax that will be used to build roads and infrastructure for these buildings,” stated the expert.

The economist said that municipal heritage can be a source of income for investment projects. An example would be the parking fee, which is underused. So are loans. The municipality makes practically all investments from loans and the way of using this instrument should be reviewed so that it is not necessary at some point to pay too much. Currently, 2% of the municipal budget goes to pay interest, which is four times more than five years ago, when only 0.5% of the entire budget was used to pay interest.

Veaceslav Ionita also said that the expenditure of the municipal budget the last five years represented 6% and 7% of all costs of the national public budget. The budget expenditure in the municipality of Chisinau during the last few years was approves at a level that is by 10-12% higher than what was actually executed. 10-12% of the planned projects are not implemented. “In 2021, 6.3 billion lei was planned and less than 5.3 billion lei was used. Since 2017, the budget has not been executed as planned because not all the set objectives are achieved,” concluded the expert.

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