The Association of Estonian Cities and Municipalities wants local governments to have more rights to decide how to use state money.
Veikko Luhalaid, the association's executive director, says that Estonia's local governments have very little financial freedom. He compares this to the situation in Bulgaria and Greece.
Local governments have their own budget, but they cannot change it themselves. They cannot collect taxes or earn money. The budget is made according to laws and the state budget.
Local governments want the state not to strictly determine how the money is used. For example, 118.4 million euros is currently allocated for specific purposes, such as road repairs.
If the money did not have a "label," local governments could decide for themselves how to use it. However, they would still have to contribute part of the funds themselves.
Luhalaid says that the amount of support has remained the same over the years, although the income tax has increased. If the support were tied to income tax, local governments would have more money.
The 2025 budget provides a lot of support for local governments. For example, for schools, kindergartens, youth, and roads.
According to the association's proposal, 118.4 million euros would be available for free use from 2027. This would be divided for schools, youth, children, and roads.