Opposition critical of amendments to municipality funding law

The amendments to the Financing of Municipalities Act set out a new way of calculating the per capita funding municipalities receive straight from the national budget and lay down a legal basis for municipalities to borrow from international development banks to carry out infrastructure projects included in their municipal budgets.

The proposal increases the maximum amount of municipalities' borrowing from 10% to 15%, and allows municipalities to issue municipal bonds.

The opposition Democratic Party (SDS) proposed a public presentation of the changes before the debate, saying that the new measures had not been presented well and that the content and the purpose of the amendments or the financial effects for individual municipalities were not clear. Its proposal was voted down though.

Public Administration State Secretary Jure Trbič replied that the main solutions were result of long-term negotiations with municipality associations. The Association of Municipalities and Towns (SOS) and the Association of City Municipalities (ZMOS), two of the three main municipality associations that represent 195 of Slovenia's 212 municipalities, support the changes, he noted.

Vida Čadonič Špelič from the junior opposition party New Slovenia (NSi) said she supported many solutions from the proposal but not the part dealing with dedicated spending for Roma communities.

She regretted the fact that the Association of Municipalities (ZOS), which represents 127 mostly smaller municipalities, was not on board.

She also said that the other two associations did not agree with all of the proposed solutions, most notable the provisions on the funding of municipalities with Roma inhabitants. She expressed support for the SDS's proposal to scrap these provisions, which was voted down along with all other proposals given by the largest opposition party.

SDS MP Andrej Poglajen maintained that some municipalities were in a subordinate position, for example those which were bigger but had fewer inhabitants and higher road maintenance costs, as the number of inhabitants was crucial in calculations of funding for each municipality.

Rather than offering additional options for borrowing for infrastructure investments the state could allocate more funds to these municipalities to release their development potential, he proposed.

Tamara Kozlovič from the ruling Freedom Movement said that the amendments did away with some anomalies that municipalities had been warning about for years and set up a fairer system, which the SOS and ZMOS agree with.

She said that the ZOS opposed only one article but if it were written differently the other two associations would find it unacceptable.

Because municipalities in Slovenia are so diverse, it is impossible to create a system that will please everyone, she said. As for borrowing, Kozlovič stressed this would only be an option not a must.

Tereza Novak (Freedom Movement) and Tatjana Greif (Left) welcomed the provisions on dedicated spending for Roma communities and the introduction of reporting on the use of these funds.

The committee endorsed proposals tabled by the Left and the Freedom Movement that include deadlines for the state transfer of funds to these municipalities if they submit the report on spending in the past year. The coalition also inserted the provision under which the amount of these funds would be set under the current system for this year.