The government is “working to keep everyone afloat”, including local governments, Balázs Fürjes, the state secretary at the Prime Minister’s Office responsible for the development of Budapest and its agglomeration, said after meeting the mayor of Budapest and its districts.
Fürjes saod the coronavirus pandemic was putting local governments under strain, adding, however, that “there can be no question of austerity or tax increases”. “Our recipe is tax cuts, investments, and support for businesses and families.” Investments must get priority as these help to maintain jobs while aiding businesses and families, he said. Thursday’s meeting, he said, was “good-natured” and the first of a series of talks aimed at solving the problems of Budapesters. He said the government awaited written responses from the mayors regarding revenue losses caused by the cut of the business tax. Fürjes said he had agreed with Gergely Karácsony, Budapest’s mayor, that the next meeting of the Budapest Public Development Council (FKT) will be held on March 18. Talks will focus on possible compensation for the loss of income in the capital, the launch of new developments, as well as consultations on the use of European Union recovery fund resources in the capital, he said. Fürjes indicated that large amounts of monies would be available to spend on the development of Budapest in the next EU budget cycle.
Karácsony told a briefing afterwards that the negotiations on compensation for lost revenues had ended unsuccessfully. “It’s hard to keep in good faith,” he said, adding that even under the threat of the dismantling of Budapest’s municipalities, “we are partners in every conciliation”. Karácsony said the Budapest local governments had made four demands: automatic compensation for the loss of business tax revenues, the abolition of free parking, the demand that opposition-led local governments receive previously promised but withdrawn subsidies, and that the government enter into meaningful negotiations with local governments on the use of the EU recovery fund. He said the metropolitan council had lost 12 billion forints and the districts 10 billion forints due to the business tax rebate granted to businesses. Meanwhile, the central government decree on free parking enacted during the pandemic caused traffic chaos in the city and put yet another financial burden on local governments due to further lost revenues, he said.
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