MUNICIPALITIES said yesterday they would fight to regain their budgets - shrunk by €18 million because of austerity measures.
“What we have to make clear is that we will have municipalities shutting down one after the other,” the head of the municipalities’ union and Famagusta Mayor Alexis Galanos said.
He was briefing the press prior to a closed-door emergency general meeting.
“These are very harsh conditions and I’m saying this without exaggeration,” Galanos said.
He said that municipalities may be forced to fire people and be unable to pay their expenses.
The state reduced the budget allocated to the (non-occupied) municipalities for this year by 8.3 per cent, and Parliament cut a further 8.0 per cent. Instead of the anticipated €71 million there was €60 million.
Municipalities also lost €7.0 million because the state reduced a subsidy offered to them as compensation for the 2003 abolition of the professional tax.
Galanos said that budget cuts were effectively bigger because they coincided with the creation of six new municipalities - there are now 30 - and so there was less money available for each municipality. By law, any community which grows to 5,000 people becomes a municipality.
Up until this year, the municipalities’ union allocated one third of the budget equally and then distributed the remainder by population size.
It is not clear how money will now be allocated.
Galanos admitted that municipalities needed to consider “long term solutions” in terms of self-financing and austerity and said that they would consider the suggestions by the mayors of greater Nicosia (greater control over taxes, cost reduction, early staff retirement, among others).
But he said that they first needed to retrieve their money.
Of the ten municipalities comprising greater Nicosia, only Strovolos balanced its books.
Nicosia Mayor Constantinos Yorkadjis said that with cost cutting measures his municipality’s deficit could come to €2.7 million. Under the previous budget contribution system, Nicosia was due to get €4.0 million, lost with the budget cuts.
Galanos said he was meeting Finance Minister Vassos Shiarly next week and suggested the municipalities appeal to President Demetris Christofias.
“We are part of the state. The same people who vote for the President and deputies also vote for us,” he said.
