Prague and its municipalities will lose billions due to the virus
Prague, which has a budget as large as the Ministry of the Interior, will have to expect a significant decline. “The revenue bases of our budget are taxes from the budget determination of taxes, which are redistributed by the state. At a time when the economy has stopped to a large extent and the state is preparing tax breaks, it is certain that I know this in the capital’s income, “said Deputy Finance Minister Pavel Vyhnánek (Prague himself), according to which it will depend on how how long the crisis will last and how extensive the state will take.
For example, the city is already losing revenues from parking zones, which it will temporarily cancel and from which the municipality receives up to 63 million crowns a month. According to Vyhnánek, the final impact on the budget cannot be predicted now. “But it can already be said that these will be outages in billions of crowns,” Vyhnánek said. The city expects revenues of around eighty billion crowns this year.
In addition, the metropolis spent several hundred on the purchase of medical supplies, support for firefighters and other institutions. In addition, it also sent almost 400 million crowns to city districts to fight the epidemic. Councilors also discuss the postponement or forgiveness of rents to entrepreneurs in urban areas, or residents of municipal housing. Rental income is 136 million a month.
Vyhnánek will want to balance the budget with surpluses and reserves from previous years, or the city will borrow as a last resort. In the past, Prague has issued bonds or borrowed from the European Investment Bank for some projects. “Prague has sufficient reserves in the past, but in the event of any dramatic development, we would consider a loan,” admits Vyhnánek. The loan is being considered, for example, in connection with the planned construction of metro D. The municipality does not want to cut the planned investments.
“We should not jeopardize the city’s ability to invest. “Investment is something that has the potential of the healthiest way to get the economy back on its feet,” he added.
Municipalities and cities in the Czech Republic manage approximately 300 billion crowns a year. “It simply came to our notice then. On the contrary. The vast majority of them are already dedicated to specific investment plans. The drop in revenues will have to be significant, “said Radka Vladyková, director of the Union of Towns and Municipalities, who said that she should allocate billions from the budget to help municipalities. You have to try to keep the local entrepreneurs, tradesmen and craftsmen alive. For example, abandoned schools or offices can be reconstructed.
Regions will also lose money from taxes, which are also pouring funds into regional hospitals and other institutions.