Tartu plans to increase debt by nearly 40 percent

Tartu plans to increase its debt by nearly 40 percent in the coming years, reaching about 265 million euros by 2030, ERR reported. The city says it needs to borrow to cover investment plans and the effects of a revenue redistribution reform known as the “Robin Hood” reform.

The city’s debt obligations currently exceed 190 million euros. Deputy Mayor Martin Bek said they would rise to around 210 million euros next year and then approach 260 million euros, adding roughly 50 million to 60 million euros over the period. He said the reform would reduce Tartu’s available funds by 17 million euros over the strategic period, while the city’s costs have risen and income tax receipts are expected to be lower.

Tartu plans to invest a total of 290 million euros over the next four years. The plans include a 26 million euro renovation of Veeriku School, about 100 million euros for a cultural centre and 60 million euros for education facilities, including schools, kindergartens and maintenance. The city also plans to spend nearly 10 million euros on sustainable transport.

Opposition Centre Party member Artjom Suvorov said the city was living beyond its means and should review its investments. He said interest payments could reach nearly 10 million euros in 2030. Suvorov added that, with the euro’s benchmark interest rate, Euribor, near 3 percent, a one percentage point rise would cost the city 1 million euros a year.

Opposition member Elo Kiivet also described the debt burden as large, but said the planned investments would be difficult to postpone. She said the city should monitor interest costs and consider whether to adjust its borrowing after Siuru is completed.