The Tallinn City Government has submitted a budget proposal for 2024 to the City Council, totaling 1.26 billion euros, marking an increase of 79.5 million euros or 6.7 percent compared to the revised 2023 budget.

Mayor Mihhail Kõlvart says that in times of economic downturn, it is crucial to support the residents, and the public sector must follow a countercyclical principle and invest to stimulate the economy. “Therefore, our investments will increase by 20 percent to 250 million euros. For instance, we have agreed on investments supporting the domestic wooden house industry during challenging times. This move will bring more public wooden buildings into the city and support an industry with high export potential. We plan to order wooden buildings for kindergartens, beach houses, and circular economy centers,” Kõlvart stated. “Traditionally, the largest investments are in the education sector, such as the expansion of the Reaalkool school and the construction of the Kullo hobby centre. Next year, we finally start the reconstruction of Peterburi Road, as all the preparatory work is completed. Tallinna Linnatransport will significantly renew the public transport fleet, introducing 12 new trams and 15 electric buses in 2024,” added Kõlvart.

For mobility, previously under transportation and roads, the operational costs are planned at 182 million euros, with investments of 87 million euros. In collaboration with the Environmental Investment Centre, the city will purchase electric buses with publicly accessible charging stations. Next year will see the start of Peterburi Road reconstruction and continuation of the Old City Harbour tramway construction funded externally. The construction of the Tondi grade-separated junction and partial reconstruction of Kotka Street will also conclude. More funds will be allocated for the construction and repair of tunnels, bridges, and viaducts. The Kadaka Road viaduct will be reconstructed, and pedestrian and cyclist tunnels near the Paldiski Road and Endla Street railway viaducts will be built. Construction of pedestrian and cyclist tunnels near the Tartu Road railway viaduct and along the future Rail Baltic route will begin.

Deputy Mayor Kaarel Oja notes that mobility and urban space are the areas where positive changes will be most noticeable next year. “This is quite a bold budget, allowing Tallinn to confidently pursue its key goals despite economic slowdowns. Work continues in developing bike lanes and public transport, and night buses will operate year-round,” said Kaarel Oja. “Besides investments, public services are equally important, especially during tough times. For instance, kindergarten fees in Tallinn won’t increase for the third year in a row, remaining at 71 euros,” added Oja.

The 2024 budget draft allocates 252 million euros for investments, a 21.2 percent increase from the revised 2023 budget. Investments will be financed 44.2 percent from city’s funds and up to 49.6 percent through loans. The largest investment sectors are mobility (34.2 percent), education (27.5 percent), and culture and heritage (8.5 percent), together accounting for 70 percent of the total investment volume.

Next year will see the continuation of major cultural projects, including the Tallinn City Theatre complex and the new Tiger Valley exhibition at Tallinn Zoo. There will also be improvements in parks and green areas, and the start of the Green Capital flagship project, the Pollinator Highway, and the first phase of the Klindi park.

For operational expenses, the 2024 budget plans 984.1 million euros, 3.8 percent more than the revised 2023 budget. The largest portion is allocated to education (40.9 percent), followed by mobility (18.9 percent) and social welfare and healthcare (15 percent), collectively accounting for over 74 percent of total expenses.

“In education, our priority for 2024 is the transition to Estonian-language education, with over 8.8 million euros planned for supportive activities. These include teacher training, teacher recruitment, methodological support and motivation, supporting children in the transition, and aiding and advising both parents and teachers, as well as creating an online learning environment,” said Kõlvart.

Education investments are planned at 70 million euros. In 2024, the renovation of Tallinna Kunstikool and the Tartu Road 23 building for additional space for Tallinn 21st School will conclude. The extension of Tallinn Secondary School of Science (Tallinna Reaalkool), renovation, and extension of Hiiu School, the final phase of Pirita Economic Secondary School extension, the construction of the new Kullo hobby center, and the reconstruction of Karjamaa Street 18 as a school building will begin. The design of Tallinn Nõmme Basic School will continue, and the design process of Kalamaja Basic School will start.

The Mayor adds that Tallinn will continue strengthening crisis preparedness. “We are purchasing additional electric generators and creating a budget line for taking over the Kopli Fire Department – our goal is to keep the Kopli Fire Department operational,” said Kõlvart.

“The social support budget increases by 10 percent in total. 4.1 million euros are allocated for support services for children in need, allowing an increase in the hourly rate for support workers from 7 to 9 euros. For example, the support for pensioners to compensate for price increases will rise from 175 to 200 euros, and the beginning of the academic year support from 75 to 100 euros,” Kõlvart said.

For the coming year, Tallinn has budgeted operational costs of 121.9 million euros and investments of 9.7 million euros in the social sector. A new initiative, in collaboration with the SA Lapse Heaolu Arengukeskus (Child Welfare Development Center), is the establishment of the Perepesa network of community-based prevention and family service centers. The first center is planned to open in the city centre on Asula Street. Additional funds will be allocated for psychological counseling for those in need and underprivileged families. To ensure the availability of support services for children in need, the hourly rate for support workers will be raised to 9 euros, and from next year, the support rate for a child with disabilities will increase to 150 euros.

The overall revenue for the city in 2024 is projected to be 1.06 billion euros, of which tax revenues account for 71.5 percent. The city's primary source of income is personal income tax, projected at 715 million euros for 2024, an increase of 65.3 million euros, or 10.1 percent more than the revised budget for 2023. State and other institutional subsidies are forecasted at 169.2 million euros, income from the sale of goods and services by city-run institutions at 110.1 million euros, land tax at 25.1 million euros, and external funding at 11.6 million euros.

For financing investments, Tallinn plans to take out loans totaling up to 125 million euros in 2024, resulting in a projected net debt burden of 34 percent by the end of the year. Additionally, up to 70 million euros from reserves accumulated in previous years will be directed to cover budget expenditures.

The 2024 budget, approved by the City Government, was sent to the Tallinn City Council yesterday. The draft is available for review (in Estonian) in Tallinn's legal information system TEELE.