The draft decree, in which the government wants to limit spending in November and December on average for the first 10 months of 2023, will block local investment projects, several mayors told HotNews.ro.

They accuse that the city halls are forced to have a budget surplus, limiting expenses, and the surplus will be transferred to the reserve fund at the next stage.

The silence regarding the harmful consequences of the draft ordinance is caused by the fact that the Government can exempt certain expenses from the limit by memorandum, and the mayors are afraid to say something in the conditions when they will be at the hands of the executive power. to unlock certain projects, sources explained to HotNews.ro.

The draft order is on the agenda of a government meeting on Friday, and Prime Minister Marcel Čolaku has announced that it will be adopted.

• “The draft order is deeply harmful, it does not take into account how the main credit managers plan to implement the budget. This draft order mainly hits those who invested a lot of money. why Because the investment cycle is such that in the first months of the year, until the budget is adopted, until the tenders are held, in the first months of the year no money is spent on investments, but in the last part of the year.
• Or the Government says that investments can be made within the average monthly rate of the first ten months. This means that we will practically not be able to complete investments, these are abandoned construction sites, that contracts can no longer be paid. Invoices can only be issued after receipt.
• Investment works usually begin after the approval of the budget, work is carried out in the summer, most investments are completed in autumn and winter. Those who deal with budgeting and budget implementation know this very well,” Sector 2 Mayor Radu Mihaj told HotNews.ro.

He believes that setting a limit for the average of the first 10 months of the year is simply criminal, both for those who make investments and for their suppliers.

However, the austerity measures are not aimed at Christmas lights and concerts, Radu Mihaju says.

“Christmas lights and concerts have been exempted, they can be funded, so the supports can be funded, but the investment cannot,” he said.

The mayor says that sector 2 will lose up to 200 million lei, which will be taken by the government next year.

“For sector 2, this means that next year they will take about 100-200 million from us, although this is not in the draft order, but I heard from sources that next year the surplus they are forcing us to make will be included in the state budget, in reserve fund of the Government. This is called outlawing, highway robbery or fiscal robbery that the government is doing to municipalities that have current investments,” Mihayu explained.

Mihai Kirika: “The decree grossly violates local autonomy”

Mihai Kirika, the mayor of Iasi, says the draft ordinance violates local autonomy.

• “We will see in what form it will be accepted. We have several points of view sent to the Government. My personal opinion is that the Regulation grossly violates local autonomy. The advisory forum, together with the executive, must decide how to spend the money according to the needs of the citizens of this community. The order says that spending on goods and services becomes surplus, and surpluses are directed to investment projects from non-refundable funds.
• You can no longer make new investments, and you are forced to finance the ones already started, and in priority – non-refundable funds. But I also ask a question, if my surplus is 100 lei and the funding requirement for grant projects is 1 lei, that means 99 lei you make me automatically surplus in 2024, but you leave me in debt to fulfill the development fund budget of the current year,” Chirica explained to HotNews.ro.

Chirica says local governments should be left to decide on a need-to-know basis where they have surplus to close current projects.

“As for the show, it’s a pain in the ass, you can’t make them, but you can make them. That is, those related to the day of the city and those at the end of the year are possible, and it can be from November to January, if someone wants to do something like that. It’s another thing, if the roof breaks in a social hostel or in the City Hall, I have to fix it, I can’t sit with a basin until spring. I believe in the autonomy of state authorities so that we do not return to the times we look at with sadness,” Kirika explained.

Mayor: “Practically now the Government is forcing us to have a budget surplus so that it will probably be transferred to the reserve fund”

Another mayor, on the condition of anonymity, stated that the city halls in general fulfilled about 40-50% of the expenditure part of the budget in October, because the payments to the builders go until the end of the year, and the measure is to force the creation of a budget surplus, which will then be taken/punished by the government.

“Everyone has their work ready for November-December, even if the builders are working, the mayors do not give them money until they make sure that the work is in order, that the manager has checked that everything is fine. Almost everyone’s spending budget is about 40-50% done in November, and by the end of the year they’re easily 90% if they have ongoing projects. Practically now, the Government forces us to have a budget surplus, so that it is probably transferred to the reserve fund or to give a fine if you have less than 50% of expenses, in order to automatically take 10% of the budget,” the mayor explained.

He says that the mayors did not come out to speak out of fear.

“If this ordinance passes, all they’re going to do is approve us changing the cap on investment through a memorandum, so no one is coming out publicly to say because the mayors are afraid they’ll be at a loss when they go to file the memorandum. “, the mayor explained

The deputy mayor of Cluj-Napoca, Dan Tarca, says that Romania is forced to take such measures in order not to lose European funding.

“We join this Decree. It is good to eliminate waste, but not at the expense of investment. I believe that investments should remain and each administrative-territorial unit should be careful how it spends its funds. On the one hand, we must understand Romania’s need to cover the necessary deficit. In Cluj-Napoca, everything is clear, we fall under the provisions of this project, but the city halls decided to make their expenses by the end of the year, but this is the situation. Romania must enter the target deficit in order not to jeopardize even one lei of European money coming to Romania,” Tarca explained to HotNews.ro.

What does the draft ordinance provide for

• In 2023, starting with the entry into force of this emergency order, credit employees of state authorities and institutions cannot take legal obligations under the categories of expenses provided for by the following items of budget expenses:

a) “Goods and services” for the paragraphs “Office supplies” and “Other goods and services for maintenance and operation”;

b) Current repairs;

c) goods of the nature of commodity and material values;

d) Books, publications and documentary materials;

e) consulting and expertise;

f) professional training;

g) Research and studies;

h) Contribution of local public administration to the implementation of some works and

local public interest services based on association agreements or contracts;

i) other expenses, with the exception of the paragraphs “Rent” and “Collection of budgetary claims”;

j) Associations and foundations, with the exception of obligations aimed at the spheres of “Health care” and “Social assistance”

• The heads of state authorities and institutions are required to order the necessary measures to be taken so that in November-December 2023, monthly payments under the “Goods and Services” budget expenditure item are no more than the average level of payments made for January-September 2023, within the estimate approved under this title of expenses.

• In 2023, starting from the entry into force of this emergency order, local public institutions and authorities, regardless of the method of financing and subordination, cannot finance the organization of public events with public funds, with the exception of donations and sponsorships such as: but not limited to , festivals, concerts, local competitions, festivities, themed holidays. Excludes expenses related to holding events on days declared as official days of administrative and territorial units, other public holidays established by legislation, as well as expenses related to events at the end of the year. The costs of organizing these events cannot exceed the average monthly costs of the same nature incurred in the period from January to September 2023. Any costs of this nature in excess of a pre-set limit may be met through donations and sponsorships.

• As an exception – in well-founded situations, the Government of Romania can approve, on the basis of a memorandum, the conclusion of legal obligations, i.e. the exceeding of payment limits under the “Goods and services” budget expenditure item, initiated by the main managers of loans, and in the case of administrative-territorial units/subdivisions, initiated by the Ministry of Development, Public Works and Administration, upon their justified request

Read the entire project here.

• In 2023, starting with the entry into force of this emergency order, state institutions and authorities do not undertake legal obligations regarding the categories of investment expenses provided for in Art. 381 of Law No. 500/2002 as amended and to Art. 46 of Law No. 273/2006, as amended (No. Expenditures on state investments and other investment costs financed from state funds). The heads of state authorities and institutions are obliged to order the necessary measures to be taken so that the monthly payments made in the period November-December 2023 for the expenses provided for in paragraph 1 (no. for investments) were at most at the level of the average amount of payments, carried out for January-September 2023, within the approved budget. Expenditures related to the implementation of projects financed by external grants and the National Recovery and Resilience Plan are excluded.