Tallinn's City Government sent a draft of the city's budget for the next year to the City Council, total amount for the budget is 861.5 million euros, which is 4.6 percent more than the budget approved in the beginning of this year. The total volume of investments that would stimulate the economy is planned to be 165.6 million euros, which is 17 percent more than this year.
„Despite the decrease in the revenues of the city's income, Tallinn's current conservative budget policy enables to anticipate the necessary expenditures for the uninterrupted provision of public services next year and to increase the volume of the city's investments, which also includes the goal of stimulating our city's economy, “ said mayor Mihhail Kõlvart.
„We will focus most of our investments on the road construction, education and public transport. Given the current difficult situation due to the spread of the virus, we are planning to extend both temporary and permanent support to our city's residents. And we have also set aside a reserve of 1 million euros for next year to cover the costs of preventing and combating the spread of Covid-19. We will also pay attention to the general well-being of our city, which includes street cleaning, maintenance of green areas and landscaping, “ added Kõlvart.
According to the mayor, similarly with this year, Tallinn will take in a loan of up to 70 million euros in order to finance investments. „ We will also direct up to 21.8 million euros from the reserves collected during previous years to cover expenses, while keeping the city's net debt burden at 35.5 percent. This is more than two times below the debt burden of the currently allowed 80 percent,” explained Kõlvart.
The actual need and the amount for the loan, which is planned to cover the city's investments depends on the city's revenues, that will proceed in the middle of next year, the balance of the city's liquid assets as well as the implementation of the planned investments.
The city's revenues will decrease by a total of one percent: personal income tax revenue, received financing, as well as land tax and dividend revenues are all decreasing. The main reason for the lower revenue of the city's main source of income, which is the income tax, is the decrease of the city's residents' income tax revenue due to the crisis. „We proceed on a conservative forecast that the number of city's residents that contribute income tax will not increase in 2021," said the mayor.
The largest share of the operating costs of the city's budget will be education, accounting for 41.1 percent of the costs, which is a total of 277.3 million euros. Investments to the field of education make up 29.2 percent of the city's total investments, staying close to 48.4 million euros. In 2021, three schools and four kindergartens will be renovated, two schools will get enlargements, Nõmme Gymnasium will get a sports building.
Investments in the area of culture will make up 16.8 million euros from the budget, and the largest projects are the development of the Tallinn City Theater, Tallinn Zoo and Tallinn Botanical Garden. The volume of investments in the sports area will increase to a total of 5.6 million euros, the largest of which are the complete renovation of Tallinn Sports Hall and the renovation of Kadriorg Stadium.
A significant part of the city's budget spendings will be covered by the sector of the city's transport, accounting for 14.1 percent of the city's spendings, while next year's budget is planned to be 86 million euros and the volume of city's transport investments will increase to 3.7 million euros. With this, 100 new gas buses will be purchased next year and the use of school buses will be expanded.
The maintenance, construction and reconstruction of roads, streets and street lighting also continues to be important. A total of 35.8 million euros has been earmarked for this purpose in next year's budget. The largest increase in the volume of investments will be made in the field of roads and streets, staying close to 30 percent, a total of 53.8 million euros is planned for the overhaul and reconstruction of roads and streets.
In the coming year, Tallinn will invest 17 million euros in maintenance, of which more than 10 million euros is planned for the arrangement, reconstruction and construction of 15 parks and green areas. A total of 6 million euros is planned for the construction of Tondiraba park. Playgrounds and park elements will be built, expanded and reconstructed for 2.6 million euros.
In the field of social welfare, existing support measures will be continued, as well as both temporary and permanent support measures will be extended to those in need. The plan is also to increase the support for the elderly, ie the city pension supplement, to 125 euros from next year. Each year, city spends a total of 11.4 million euros on this support. Expenditures in the field of social welfare will increase by 9 percent next year compared to this year, reaching a total of 57.8 million euros. The city will make investments in this field for 9.2 million euros, which also includes the start of construction of the nursing home of the Iru care home.
For the first time, there are also funds planned in the city's budget for the project of inclusive budget. The total amount located for that is planned to be 800 000 euros.
Fitch Ratings has confirmed Tallinn’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'AA-' with Stable Outlook. The agency has also evaluated the outlook of the rating as stable also in the context of the expected recession due to the ongoing coronavirus crisis.