Budget negotiations between Regional Minister and Local Government Associations Cooperation Assembly to continue on September 26

Press release no. 139

As a result of the budget negotiations that have taken place today, September 13, between the inter-ministerial committee of the Government of the Republic and the Local Government Associations Cooperation Assembly, the parties have failed to reach a consensus regarding budgets for local governments for the year 2007. The negotiations will continue on September 26.

According to the proposal put forward by the inter-ministerial committee presided over by Regional Minister Jaan Õunapuu, the budgetary increase for local governments in 2007 will constitute 2.5 billion kroons - a 24.7% revenue base growth. The local governments' compensatory fund will increase in 2007 by 270 million kroons and according to the forecast of the income tax revenue to be received by local governments, it will grow by 1.2 billion kroons in 2007.

On the basis of today's round of budget negotiations Regional Minister Jaan Õunapuu will put forward at the meeting of the government on September 14 a proposal to further increase by 73 million kroons the income tax revenue to be received by local governments.

Jaan Õunapuu: "The local government budget negotiations are exactly where the state in cooperation with local government representatives tries to find solutions to bottlenecks that hinder development of cities and rural municipalities," said Regional Minister Jaan Õunapuu, adding that the parties hope to sign the final protocol of the negotiations by the end of September.

In this round of the local government budget negotiations the parties have failed to reach a consensus on financial, environmental and social issues. The discussion has also covered the topics of transport and roads, education, social and healthcare, culture and municipalisation of land.

The participating parties are the inter-ministerial committee of the Government of the Republic and the delegation of the Local Government Associations Cooperation Assembly. The inter-ministerial committee of the Government of the Republic is presided over by Regional Minister Jaan Õunapuu and the delegation of the Local Government Associations Cooperation Assembly is presided over by Margus Lepik, Chairman of the Association of Estonian Cities, and Kurmet Müürsepp, Chairman of the Association of Municipalities of Estonia.