Christmas comes late to Hungary’s municipalities

December 30, 2014


When the going gets tough, the government of Viktor Orbán does what it does best: spend a lot of money it does not have and can ill afford.

In the wake of an unexpected bump in tax revenues in November, various ruling party MPs and mayors announced this week that the national government was distributing billions of forints to various local governments.  Although the national government assumed much of their debts in 2013 and 2014, local government-owned companies have been hard hit by parliament-mandated decreases in utility costs.

The local government of Szekszárd received HUF 700 million (USD 2.75 million) with which to pay off a HUF 900 million (USD 3.5 million) loan it assumed from the Szekszárdi Water and Sewer Works Kft. in 2013.  According to mayor Resző Ács (Fidesz-KDNP) municipal funds freed up from servicing that debt can now be applied towards development grant equity requirements.  In 2014 the local government reportedly built 2.8 km of sidewalks, 1.5 km of roads, expanded one of its cemeteries, modernized public lighting and completed its renovation of the city center.

The southwestern cities of Zalaegerszeg, Nagykanizsa and Leni were given HUF 800 million (USD 3.1 million), HUF 500 million (USD 1.96 million) and HUF 400 million (USD 1.6 million), respectively, to apply towards development and operating expenditures.  The Zala county capital received HUF 800 million of grants in 2012 and HUF 1.3 billion (USD 5.1 million) in 2013.  The Hungarian News Service (MTI) quotes Zalaegerszeg mayor Zoltán Balaicz (Fidezs-KDNP) as saying that while the money helps to stabilize the city financially, “it is not possible to depend on grants forever” and for this reason it is necessary to stabilize the city’s budget.

Minister of Defense Csaba Hende, Fidesz MP from the western city of Szombathely, held a press conference on Tuesday to announce that three development areas would receive HUF 8.7 billion (USD 34.2 million) in government support.   HUF 2.2 billion (USD 8.6 million) is to be used to build an indoor swimming pool, and HUF 1.47 billion (USD 5.8 million) is to support the city’s economic development.  This money is reportedly to be used to save the Styl clothing factory which has been in receivership for some ten years, and the jobs of its 600 employees.

Szombathely is also to receive HUF 5 billion for projects in 2016 commemorating the 1700th anniversary of the birth of Saint Márton.  According to Hende the high point of the event might be a visit from Pope Francis.  City mayor Tivadar Puskás (Fidesz-KDNP) said the money would be spent on improvements to the seat of the church and environments, the Bishop’s Palace, the Smidt Museum and environs, the Saint Márton temple and environs, the Savaria Museum and the Saint Márton road.

(One can only speculate how Pope Francis would feel about the government of Hungary spending this money refurbishing religious buildings instead of caring for the one-third of Hungarians either living in poverty or under threat of poverty).

The western cities of Várpolata, Ösi, Alsóörs and Litér are to receive HUF 300 million (USD 1.2 million), HUF 200 million (USD 784,000), HUF 150 million (USD 588,000) and HUF 82 million (USD 322,000), respectively, with which to finance the operations of local governments.

Várpalota mayor Márta Talabér (Fidesz-KDNP) told MTI the city would use the money primarily to solve the storm sewer drainage problem of its Kismező and Loncsos areas.  Ösi will renovate a sports hall, Litér will build sidewalks and renovate a public dental clinic, and Alsóőrs will use its year-end bonus to fund touristic projects.

The western city of Sopron is to receive HUF 700 million (USD 2.75 million) to fund local government obligations, announced mayor Tamás Fodor (Fidesz-KDNP) on Tuesday.  He said 2015 would be “the year of big projects”, anticipating the completion of the Fertőrákos Quarry and Cave theatre, the renovation of the Castle district and the Erzsébet garden, as well as social housing buildings.  The mayor said the city would also develop both the MKB Arena and the city stadium.

The eastern city of Nyíregyháza is to receive HUF 1 billion (USD 3.9 million) with which to pay off foreign currency-denominated bonds issued by a city-owned company, according to mayor Ferenc Kovács (Fidesz-KDNP).  In 2008 the city guaranteed repayment of bonds issued in 2005 by Sóstó-Gyógyfürdők Zrt., the first tranche of which comes due on January 4, 2015.  The mayor said that without the government’s help the city would not be able to complete projects started three years ago.

The northern city of Miskolc is to receive HUF 1 billion (USD 3.9 million), according to mayor Ákos Kriza (Fidesz-KDNP), with which to finance touristic improvements in Miskolctapolca.   MTI reports that the government has already supported this concept, contributing nearly HUF 1 billion towards the construction of an outdoor water recreation area scheduled for completion in 2015.  The city’s budget for 2015 includes the HUF 500 million (USD 1.96 million) necessary to complete the project.

Fidesz MP Zsolt Nitrai held a press conference on Monday to announce that the northern city of Eger is to receive HUF 625 million (USD 2.45 million), of which HUF 174 million (USD 682,000) will be used to pay off the debts of a city-owned company, Agria-Human Public Service Non-profit Kft., according to mayor László Habis.  He said most of the rest of the funds would be used to fund city operations in addition to improving local transportation, but that HUF 50 million (USD 196,000) would fund the reconstruction of the baroque paintings in Saint Francis Temple.