Prague’s 2018 budget is ‘conceived as balanced’

The budget counts on reducing debt while financing big projects such as Metro D

The Prague City Council approved a municipal budget for 2018 with total expenditures is Kč 70.3 billion. Current expenditures of Kč 53.6 billion and capital expenditures of Kč 16.8 billion are expected.

Opposition politicians have criticized the budget for being extravagant.

“In the 2018 budget we count on revenues of Kč 54.1 billion and in expenditures of Kč 70.3 billion. …The deficit will be fully covered by year-to-year transfers and the use of temporarily free Prague resources to pre-finance state subsidies for education and state administration. So the budget is conceived as balanced,” Prague Mayor Deputy Eva Kislingerová said on the City Hall website.

For current expenditures, the City Council allocated Kč 19.6 billion for transport; Kč 12.9 billion for education, youth and sport. The social and healthcare sector will get Kč 2.6 billion, and culture and tourism will get Kč 1.8 billion.

“As in previous years, the budget is expected to further reduce Prague’s debt. We continue to repay the bonds issued with a reserve of Kč 1.2 billion and we have set aside Kč 933 million for regular repayments of EIB loans. We have another Kč 500 million ready for any early repayment of the EIB loans’ principal. I am happy that we managed to reduce Prague's net debt by Kč 18.2 billion from 2014,” Kislingerová said.

“Natural market action will move us into the next phase of the economic cycle in the foreseeable future. We are also approaching the moment when Prague starts building financially demanding projects. Debt capacity created in this way will be very useful,” Kislingerová added.

City districts will get Kč 268 million more compared to 2017. The state administration contribution will rise by Kč 47 million. “In the budget, we were able to increase the compensation for teachers of schools established by the municipal districts, especially grammar and nursery school, totaling Kč 300 million,” Kislingerová said.

The 2018 budget counts on the completion of already developed and started investments. The most important items include the completion of the new water line of the Central Wastewater Treatment Plant for Kč 1.1 billion, construction works related to the preparation of the Metro D route for Kč 1.7 billion and the reconstruction of the Exhibition Grounds (Výstaviště) in Holesovice for Kč 350 million.

The opposition criticizes the level of spending. “Consumption is growing faster than revenue, while we are in the economic boom stage," TOP 09 spokesman Jiří Nouza said, adding that expenditures rose by 7 percent while revenues grew by only 6.5 percent.

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