Municipal budget deficit forecast to reach about one billion lei in 2008

The budget deficit of the municipality of Chisinau in 2008 is expected to reach about one billion lei. At Monday’s meeting of the City Hall, the deputy mayor of Chisinau Mihai Furtuna said that the revenues for 2008 are projected to total approximately 1.34 bln lei, while the real necessities add up to 2.4 bln lei. Furtuna said that the draft municipal budget for 2008 is practically ready. It was coordinated with the subdivisions of the Chisinau Municipal Council and with the Ministry of Finance and it complies with the expenditure norms for ensuring the activity of the City Hall’s subdivisions. The revenues in 2008 will grow by only about 30 mln lei compared with the revenues projected for 2007. They will come from three main sources – the municipality’s own incomes of 1.08 bln lei, the deductions from the general state revenues of 157.7 mln lei and the transfers from the state budget of 102 mln lei. The draft budget provides for a total expenditure of 1.37 bln lei. A sum of 75.6 mln lei will go to maintain the public order. This is only 79% of the necessities. Some 698.5 mln lei be earmarked for education (77% of the necessities); 17.6 mln lei for healthcare (41%); 18.8 mln lei for transport and road management (44%); 320.8 mln lei for communal and housing economy (39%). “Such a distribution of expenses will not enable to ensure a normal activity in the municipality,” Mihai Furtuna said. The deputy mayor considers that one of the solutions to such a situation is to increase the local taxes such as the tariffs on passenger transportation service, the parking tax, the tax for placing advertisements, the market tax, the tax for retail outlets etc. He said that officials of the City Hall’s subdivisions must submit relevant proposals by November 1. Also, the City Hall will ask the Parliament to review the deductions to the municipal budget from certain taxes and duties levied in the municipality such as the value added tax, the tax for using the roads, with the aim of increasing them. It will also demand that the 50% deductions from the income tax paid by entrepreneurs be increased to 100% given that the state fixed a zero income tax and this will lead to the creation of a deficit of 350 million lei in the municipal budget for 2008. At the same time, Mihai Furtuna said that the draft state budget law for 2008 provides for an inequity as regards the transfers for budgetary evening out. According to him, the municipality of Balti will get 129 mln lei, while the municipality of Chisinau only 100 mln lei. The Parliament will be asked to allocate 250-300 mln lei to Chisinau for the purpose. If the City Hall achieves these objectives, the municipality’s revenues for 2008 could rise to 1.81 bln lei.