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MORE INCOME TAX SHOULD STAY IN LOCAL HANDS

Slovak towns and villages cry out for help

SLOVAK towns and villages are crying out that if they are not soon given help some municipalities, especially smaller ones, might collapse under the weight of the global economic downturn. The Club of Mayors of Towns of Slovakia says that even if towns and villages manage to hobble through 2009 by making budget cuts and other savings, 2010 will hit them even harder if no change is made to the way that towns and villages are financed.

SLOVAK towns and villages are crying out that if they are not soon given help some municipalities, especially smaller ones, might collapse under the weight of the global economic downturn. The Club of Mayors of Towns of Slovakia says that even if towns and villages manage to hobble through 2009 by making budget cuts and other savings, 2010 will hit them even harder if no change is made to the way that towns and villages are financed.

Slovakia’s Association of Towns and Villages (ZMOS) has already been involved in negotiations with the Finance Ministry over the financial situation of local governments.

“Some towns and villages are no longer able to fully perform some of their duties and services defined by law despite the savings measures they have applied,” Helena Poláková, spokeswoman of the association, told The Slovak Spectator.

The situation differs among particular towns and villages with the smallest villages having the greatest problems, according to Poláková.

ZMOS and the Club of Mayors of Towns of Slovakia are suggesting that a change in the distribution of revenues from income taxes paid by private individuals could improve the fiscal situation of local governments. They suggest that as much as 100 percent of these tax revenues could go to the coffers of the local governments, with 75 percent going to towns and villages and Slovakia’s eight regional governments getting the remaining 25 percent. Currently, the state government receives 6.2 percent of this tax, towns and villages get 70.3 percent and regions 23.5 percent, the SITA newswire wrote.

The executive secretary of the Club of Mayors, Marián Minarovič, said that municipalities have been saving money but that these savings are still not enough to mend the growing holes in their budgets.

The club also pointed out that the municipalities are currently providing temporary jobs to as many as 180,000 people. Minarovič suggested that if towns no longer have enough funds they cannot direct as many projects and activities, leaving these people without work, wrote SITA.

Poláková told The Slovak Spectator that a working committee of ZMOS and the Finance Ministry met on July 22 and agreed that all the fundamental positions and documents would be presented only at negotiations among this group and that the committee will be the only one to analyze and evaluate the situation and then present solutions.

Currently the ministry analyzes documents on the budgets and economic performance of the municipalities, Poláková added.

Poláková also said that currently it is not possible to fully analyze the impact of the financial crisis on employment within the local governments.

“We, however, do not assume that there will be considerable layoffs,” Poláková told The Slovak Spectator. “The volume of tasks that towns and villages must perform does not make significant interventions into the number and structure of employees possible.”

Between 2004 and 2008 the number of employees of towns and villages was reduced by 12 percent.

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