The 15% reduction of the state subsidy for Bulgarian municipalities will leave the smaller of them in a state of bankruptcy, according to representatives of the local authorities.

The cut is envisaged in the draft bill for the revision of the 2010 state budget, which has already been approved by the Cabinet, and is expected to be voted by the Parliament in mid June.

Originally, the Bulgarian government wanted to cut the subsidy for the local authorities by 20% - or by BGN 182 M. However, it revised its decision to a 10% cut after the energetic protests of the mayors from around the country.

Eventually, however, the rising budget deficit pushed the government to go for a 15% cut of the subsidy, which means saving BGN 138 M for the state budget – and this much less money for the local administrations.

Thus, a total of 4 600 out of about 26 000 employees of the local governments around Bulgaria will have to be laid off, warned the National Association of Municipalities in the Republic of Bulgaria (NAMRB). In addition, many of the smaller municipalities will be faced with virtual bankruptcy.

This is expected to reduce substantially the availability of services such as hospitals, nursery schools, and “chitalishta”, Bulgarian cultural community centers.

“If approved by the Parliament, the reduced subsidy will lead to a number of layoffs and cuts in the sphere of municipal services. Most of the layoffs will be nurses working in high schools, as well as in the field of culture, and the actual administration. This will increase the time for servicing the citizens. Many municipalities will be forced to save money from street lighting as well,” explained the Executive Director of the NAMRB, Ginka Chavdarova.

According to the Socialist Mayor of Blagoevgrad, Kostadin Paskalev, the municipal administrations have already signed public procurement contracts with private companies, and the reduction of money coming from the state will leave them in a position in which they will have no funds to honor their commitments.

“The ruling party GERB is using a double standard. It is increasing the spending on state level while cutting the spending on the local level. This means that there will be little money available to the mayors in the last year before the 2011 local elections in order to prevent them from completing projects and therefore receiving public support,” Kostadinov explained.

The National Association of Municipalities has made it clear that it will do its best to change the decision of the government back to a 10% cut. The mayors are insisting on a meeting with the Prime Minister, Boyko Borisov, in order to propose alternative measures for reducing municipal spending.

One of Bulgaria’s major trade unions, the Confederation of Independent Bulgarian Syndicates, has declared itself against the government cut warning that the layoffs of municipal employees will actually increase expenses in the short run because of the unemployment benefits and paid leaves.

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