Municipal finances put Valka under strain, Rēzekne faces wage uncertainty

Municipalities should be reporting higher revenues because of rising wages and increased personal income tax receipts, but local governments will not know until the end of the year whether their budgets have exceeded forecasts or whether they need state support, LSM reports.

Under an agreement with the government, the state assists municipalities when tax revenues fall short of forecasts. However, municipalities can benefit from better-than-expected revenues only in the following year.

Valka municipality is currently the only one already facing financial difficulties, while Rēzekne, which was recently rescued from bankruptcy, remains uncertain about how it will pay employees’ wages next year. Rēzekne is not currently showing signs of austerity, while Valka is continuing its cost-cutting measures. The Finance Ministry says Valka’s measures are insufficient.

Rēzekne continues to fund celebrations

Rēzekne recently held several days of city celebrations, including a fireworks display, performances by popular music groups and other costly events. The exact cost is not known, but around 200,000 euros has been allocated from the city’s 60 million euro budget for the celebrations, their design and several other major events.

“The programme for Rēzekne’s city celebrations is very full. This year, after many years, we have brought the hillfort territory to life,” Gunta Grabuste, a representative of the Rēzekne tourism information office, told Latvia’s public media before the celebrations marking the city’s 741st anniversary.

Rēzekne Mayor Jānis Tutins of the Together for Latvia party briefly urged people on social media to attend the celebrations. Aleksandrs Bartaševičs, the party’s founder and a former mayor who was dismissed earlier this year after failing to obtain clearance for state secrets, also published a longer address on Facebook with the help of artificial intelligence. He now plans to move from Rēzekne to parliament after being elected on the Latvia First list.

Bartaševičs said the Finance Ministry could no longer stop the city’s growth, even if the stabilisation process continued indefinitely. He said some important city projects could be delayed but not stopped, and expressed confidence that the reconstruction of a viaduct, construction of a depot and development of a spa complex near Lake Kovšu would take place soon.