Topical Information

“Tomorrow, the second provisional budget law will be submitted. The main focus will be on extending the period beyond March 31, keeping it in effect until the adoption of a new regular budget for 2026,” announced caretaker Finance Minister Georgi Klisurski during the 39th General Assembly of the National Association of Municipalities in the Republic of Bulgaria (NSORB).

At the forum, local government representatives raised questions regarding the provisional budget law, investment expenditures, and guaranteed state transfers.

The Minister clarified that the commonly used expression “1/12” does not fully describe the proposed mechanism. Instead of a limit tied to last year’s spending for the same period, municipalities will be able to spend up to the amount of their actually collected own revenues. Current expenditures will not require a municipal council decision, while capital expenditures will require explicit approval by the local council.

Klisurski emphasized that the priority remains the accelerated disbursement for projects approved by the Ministry of Regional Development and Public Works and transferred to the Bulgarian Development Bank. Currently, around €200 million are awaiting disbursement to approximately 180 municipalities.

The total financial resource for the investment program under the provisional budget law amounts to €450–460 million (approximately BGN 900 million), with some funds already disbursed. The Finance Minister acknowledged that so far, a clear and predictable procedure for implementing the national investment program has been lacking and expressed intent to improve coordination with local authorities.

Municipal representatives warned that without an adopted national budget, capital programs could face serious difficulties. Mayors stressed that targeted subsidies for capital expenditures should be provided regularly, as in previous years, to allow for public procurement and construction projects to start in the first half of the year.

Klisurski noted that the current draft does not include a separate targeted capital subsidy, with the idea that any shortfall would be covered by own revenues and funds from the investment program. He also acknowledged that adjustments may be made during discussions.

On the issue of raising the minimum wage, the Minister explained that the law establishes a hierarchy of payments, giving the highest priority to salaries and social security contributions. The possibility of covering part of the costs with own revenues remains, but this adds additional pressure on municipal budgets.

Mayors also raised concerns about the regularity of transfers—equalization subsidies, funds for local activities, and personal assistance—and requested greater predictability and guarantees for timely funding.

The discussion also addressed VAT reimbursements for completed projects funded through the State Fund “Agriculture.” Klisurski stated that the funds are planned to be included in the regular budget and assured that the issue would receive special attention, as several municipalities have been waiting for reimbursements since September.

Additionally, the upcoming changes in the municipal waste collection fee were discussed, including the need for a longer preparatory period and funding for equipment and individual metering systems.

NSORB leadership announced that the Association will submit an official position with concrete proposals regarding the provisional budget law, including a model for settlements and capital programs based on the 2023 framework, to ensure the normal functioning of municipalities until a regular national budget is adopted.