Updates: 12/17/2020 4:40 PM
Released: 17.12.2020, 16:38
Prague – The budget of the capital for next year counts on revenues and expenditures of 87.8 million crowns, which is slightly more than this year. Investments will reach almost 15 billion crowns. The effects of measures against the spread of covid-19 will exceed ten billion crowns. The city made savings in all budget chapters, with current expenditures cut by ten percent across the board. Exceptions are public transport and waste collection. The draft budget today, after many hours of discussions approved by Prague representatives.
The proposal was criticized by the opposition, which, among other things, did not like the amount earmarked for subsidies for sports or money set aside for so-called participatory budgeting.
“We have drawn up a budget in an exceptional situation. We do not know the state budget for next year, it has not yet been approved, we do not know how the tax package will turn out, we do not know what awaits us in connection with the coronavirus epidemic and its effects on the economy. There are many unknowns, but we recommend that we approve the budget. We will not end up provisionally, “said Deputy Mayor Pavel Vyhnánek (Prague Sobě).
The tax revenues of the capital should reach 56.2 million crowns, which is less than this year, when they should be 60.7 million. The city will receive about two billion crowns more from the state than this year, and up to CZK 18.1 million. This is money that the city receives for schools or state administration and which only so-called “flows through the budget of Prague.” The municipality will also use 3.3 billion crowns from previous years. On the other hand, Prague will lose its financing of crowns if the government’s plan to abolish the super-gross wage is approved.
Current expenditures on the operation of the city will be reduced by about 1.3 billion crowns to 42.4 million CZK.
Investments will reach 14.8 million crowns. Among the most fundamental will be, among others, the construction of metro D, in which the cities invested about CZK 1.7 billion from their budget and the budget of the transport company (DPP). Another 363 million will go to repair metro stations.
2.4 billion crowns will go to water mains through the Prague Water Management Company (PVS). Further investments are planned in the Malešice incinerator, repairs of bridges or completion of the Industrial Palace and renovation of public space. More than one billion will then go to education.
The current corona crisis has an impact on the economy. According to the city’s estimate, the impacts of the covid will be over ten billion crowns this year. These are both tax declines and the loss of other income, such as a decrease in selected fares in public transport.
Uncertainty in compiling the budget is not only based on the coronary crisis, but also, according to Vyhnánek, unpredictable procedures of the government and the Chamber of Deputies. Another unknown is the amount of possible retroactive application of tax losses, the so-called carryback loss. If approved by the Chamber of Deputies, the planned changes in the tax system will have an impact on the budget. If introduced, the city will lose an estimated 2.1 billion.
Next year, the city will pay its debts. It will repay part of the loan from the European Investment Bank in the amount of five billion. The same amount intended by the city administration will have to borrow. He wants to use the money to support investment. Whether Prague will actually borrow them in the end will depend on the development of the economy.
The draft budget was criticized, for example, by opposition representative Ivan Pilný (YES). For example, he lacked business support in the document, demanded more money for education and criticized that it did not include a vision for the future. “If we did a verbal analysis of the words in that presentation (budget), it would be two words – repairs and reconstructions. We can’t be satisfied in the third budget with the fact that we will do only maintenance things,” said Pilný. Vyhnánek said that the city is helping entrepreneurs this year. According to him, primarily their situation must be solved by the state.
Opposition representatives Petr Fifka (ODS) and Karel Hanzlík (ODS) criticized the part intended for subsidies in sport, which will fall by a hundred million to 321 million. Coalition representative Petr Kubíček did not like that either (TOP 09). The chairman of the Prague ODS, Tomáš Portlík, does not like 50 million for the so-called participatory budgeting, where the population decides on the use of this amount. He considers it unnecessary.
For this year, Prague has an approved budget from last December with revenues of 60.7 million and expenditures of 81.6 million crowns. The difference is called by the city, for example, from the money you want from the state. CZK 16.8 million is earmarked for investments.