Sofia Municipal Council adopted the budget for the capital for 2022

Sofia Municipal Council (SMC) on March 31 adopted the budget of the Sofia Municipality for 2022 with 33 votes in favour and 27 against. The BSP for Bulgaria and Democratic Bulgaria groups, as well as independent municipal councilors Metodi Lalov and Boris Bonev, voted against the budget.

The draft provides for expenditure of BGN 2,100,525,462.

During the meeting, Stefan Markov, chair of SMC budget and finance committee, presented the draft budget 2022.

An increase of 11% (or by 208 million BGN) is planned compared to the initial budget for 2021. Keeping the tax burden at the same level as last year, this is an optimal growth of budget expenditures that will allow the municipality to perform its usual functions as before, while increasing its investment activity a little more. On a positive note, BGN 85 million of the increased expenditure is meant for investment. The increase in expenditure is mainly financed by loans, state subsidy and local taxes, he said.

The increase of just over BGN 100 million is in state-delegated activities, which account for 38% of all activities and are financed by state subsidy. The budget is planned to be higher than last year in order to cover the increased running costs and provide resources for the implementation of our strategic priorities to the greatest possible extent, he explained.

Own revenue continues to account for 40% of the capital budget. Tax revenues are the basis for the 8% growth in own revenues in 2022. Regarding the policy towards local taxes, it should be noted that tax rates are maintained and the expected higher revenues will come mainly from the revival of the property market. Revenues from the tax on transactions with immovable properties were by 22% over last year, so this year's revenues are projected to be 37% higher than the 2021 plan. Expected property tax revenues are also up by 7%. Some 7% increase in garbage fee revenue is projected (based on our adopted budget plan last December), while revenue from kindergartens and nursery fees is decreasing by £15 million as changes to the law make them free-of-charge as of April 1, 2022. Let's not forget that fee revenues are earmarked and serve to finance the respective activity for which they are paid, he added.

The central budget subsidy for delegated state activities is increased by BGN 109 million mainly due to increase in teachers' salaries in 2022. European programmes are planned to attract almost £273m of funding, which represents 13% of our budget. The amount is slightly less than what was planned last year.

As regards the expenditure side of the budget, current expenditure is planned to increase by 9.2% compared to the initial plan for 2021 (or by BGN 126.5 million), with salary expenditure of nearly BGN 542 million and an increase of 9%. This increase is mainly due to the increase in salaries of teaching staff. BGN 164 million were again provided for the running costs of Sofia's public transport, BGN 136 million for cleaning of the capital, BGN 25 million for street lighting, etc.

Capital expenditures increased by 16% compared to the plan for 2021, or by 82.6 million BGN. The total investment budget amounts to 594 million BGN. (28% of the budget), of which only 15 million are a targeted capital subsidy from the state budget, according to Markov. He pointed out that half of the ambitious capital programme is expected to be provided by the European operational programmes for projects run by the municipality. Investment loans are increased by almost 100 million BGN that will finance the construction of the third underground line and the city’s inner ring roads.

The review of the investment programme confirms the continuation of the policy, which follows the main priority areas, namely:

1) construction of strategic transport infrastructure - BGN 211 million.

2) Water and sewerage network - BGN 90 million.

3) Street network - BGN 120 million.

4) increasing investments in kindergartens, nurseries and schools - BGN 57 million.

5) environmental protection, in particular air quality and waste management - BGN 51 million

During the discussion of the draft budget in the Budget and Finance Committee, proposals were made to increase both the revenue and expenditure side, most of which were approved by the Committee.

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