New law reduces financial obligations of municipalities

Ljubljana – The National Assembly unanimously passed on Monday legislation that reduces the financial obligations of municipalities by shifting several major outlays, for example health insurance premiums for the unemployed, onto the state budget.

The bill was originally tabled by the previous government in December 2019 but was then expanded to include new waivers of obligations proposed by this government, in what Public Administration Minister Boštjan Koritnik said was a key step towards tackling problems faced by local communities.

Municipalities are expected to save almost EUR 20 million annually by not having to pay mandatory health insurance contributions for the unemployed.

The state will also take over the financing of home care assistants (EUR 8 million annually) and coroner services (EUR 3 million). Municipalities will save almost EUR 2 million annually from accident and liability insurance for local fire brigades.

Additionally in 2021, almost EUR 26 million will be available for the balanced development of municipalities, and EUR 6 million will be available over four years for municipalities with Roma communities.

There are also several provisions that raise municipal revenue for the issuance of permits and at the same time save money by simplifying certain administrative procedures.

Speaking in the National Assembly prior to Monday’s vote, Minister Koritnik said the bill was an important shift in the financial independence of municipalities.

This ends the “very long path of the legislative proposal that will be a great relief for municipalities in the implementation of their services, not only in these unpredictable times of epidemic, but in the long run.”

Listing the many institutions and associations of municipalities that have participated in the project, Koritnik added that “we may say somewhat immodestly that it was almost an all-Slovenia project”.

The MPs carried out a second reading of the bill in November, and the final approval came at today’s extraordinary session of parliament, which means that it could be applied as of 1 January 2021.

Associations of municipalities, which have for years complained about funding shortages due to the austerity policies post-2009, have welcomed the legislation as a step in the right direction regarding the development of local government.

The legislation comes two months after municipalities and the government agreed higher per capita transfers from the national budget through 2022.

The lump sum, which was raised from EUR 589 to EUR 624 per capita in April under the new government, will be EUR 628 in 2021 and 2022. The April increase alone gave municipalities roughly EUR 80 million more annually.