Tallinn city council has approved the city’s budget strategy for the period of 2021-2024 with a budget of EUR 861.5 million for 2021.
The chairman of the council, Tiit Terik, said that the aim of the budget was to make sure that all residents of the city coped well regardless of their age and all services were ensured. As one such measure, the support for the elderly, meaning the pension supplement paid by the city, will rise from the current EUR 100 to EUR 125 from next year.
“The main source of income for the city is the personal income tax, which has declined a bit, however. To alleviate the impact of the crisis, reserves accumulated earlier will be tapped into, whereas borrowings will be used partially to finance investments,” Terik said.
Investments are budgeted to total EUR 165.6 million, which is 17% more than this year. The actual need for the loan planned to cover the investments depends on the inflow of the city’s revenues during the next year, the balance of the city’s liquid assets as well as the implementation of the planned investments.
The city’s revenue will decrease by a total of 1% – personal income tax revenue, subsidies received, as well as land tax and dividend income will decrease. The main reason for the lower receipts of the city’s main source of income, income tax, is the decrease in the number of income earners in 2020 due to the crisis.
The budget strategy points out that the further wellbeing of the economy in this crisis is determined primarily by getting the COVID-19 virus under control. According to the baseline scenario of the Ministry of Finance, Estonia’s GDP will decrease by 5.5% in 2020 and grow by 4.5% in 2021, being at the end of 2021 about 1% smaller than the level seen at the end of 2019.
In operating expenditure, the fields with the biggest shares in the strategy period are education, maintenance of roads and streets, public transport, social services and city maintenance. Greater attention will be paid to environmental sustainability, meaning circular economy and the green turnaround, projects of the smart city and realization of the bicycle strategy.
Investment activity will continue in the years covered by the strategy in all fields of activity of the city and investments are planned to total from EUR 136 million to EUR 164 million a year, with developing the city’s educational establishments, public transport and the green zone, as well as the construction and reconstruction of roads and streets continuing to occupy an important place.
The largest share of the operating costs of the city, a total of EUR 277.3 million, accounting for 41.1% of the costs, will go to the field of education. Totaling EUR 48.4 million, investments in the field of education make up 29.2% of the city’s total investments next year. In 2021, three schools and four kindergartens will be renovated, two schools will be expanded and Nomme Gymnasium will get a sports building.
Investments in the field of culture make up EUR 16.8 million of the budget, and the largest projects are the development of the Tallinn City Theater, Tallinn Zoo and the Botanical Garden. The volume of investments in the field of sports will increase to a total of EUR 5.6 million, the largest of which are the complete renovation of Tallinn Sports Hall and the renovation of Kadriorg Stadium.
A significant part of the city’s budget expenditures will go to the urban transport sector, accounting for 14.1% of the city’s expenditures, while EUR 86 million has been planned in next year’s budget for regular services expenses and the volume of urban transport investments will increase to EUR 3.7 million. With this, 100 new gas powered buses will be purchased next year and the use of school buses will be expanded.
The maintenance, construction and reconstruction of roads and streets and street lighting also continue to be important. A total of EUR 35.8 million has been earmarked for this purpose in next year’s budget. In the field of roads and streets, the largest increase in the volume of investments is also by 30%, a total of EUR 53.8 million is planned for the overhaul and reconstruction of roads and streets.
In the new year, Tallinn will invest EUR 17.1 million in upkeep, of which more than EUR 10 million has been planned for the tidying up, reconstruction and establishment of a total of 15 parks and green areas. A total of EUR 6 million is planned for the construction of the planned Tondiraba park on nearly 33 hectares. Playgrounds and park elements will be built, expanded and reconstructed for a total of EUR 2.6 million.
In the field of social welfare, existing support measures will be continued with, as well as both temporary and permanent support measures will be extended to those in need. Thus, it is planned to increase the support for the elderly, that is the city’s pension supplement, to EUR 125 from next year, and a total of EUR 11.4 million will be spent on this support from the city budget each year.
Expenditures in the field of social welfare will increase by 9% next year compared to this year, reaching a total of EUR 57.8 million. The city will make investments in the field of social welfare for EUR 9.2 million, including the start of construction of the nursing home of the Iru care home.
For the first time, the city budget also includes funds for the draft participatory budget in the total amount of EUR 800,000. Idea-gathering for the participatory budget took place until the beginning of December and 420 proposals in total were filed. A public vote on the proposals will be held on January 18-31, 2021. (ERR/Business World Magazine)