The Hungarian government will open negotiations with municipalities in January on the future reform of the solidarity contribution system. However, any changes before the upcoming elections are unlikely, Minister of Public Administration and Regional Development Tibor Navracsics said in an interview with hirado. hu on Tuesday. Navracsics confirmed that Budapest Mayor Gergely Karácsony will also be invited to the talks. He argued that the amount, calculation, and enforcement of the solidarity contribution criticized by the capital are all in line with current legislation. The minister stressed the importance of a strong partnership with Budapest, highlighting the city’s significant economic influence. Budapest’s per capita GDP is more than twice the national average, and only three counties, Győr-Moson-Sopron, Komárom-Esztergom, and Fejér, reach the national average. Though the capital has 1. 7 million residents, its daily population swells to around five million due to commuters, workers, and students, making it a central hub of the Hungarian economy. Given this situation, Navracsics said it is essential to find areas of cooperation that ensure Budapest’s stable financing while enabling the capital to take responsibility for helping less developed regions catch up. The current development gap between Budapest and the rest of the country, he noted, is unsustainable in the long term. Although he is not a member of the committee discussing Budapest’s funding issues, Navracsics said he regularly consults with the mayor, mainly on development matters such as the Healthy Streets programme or new tram acquisitions. Since September, these initiatives have brought roughly 80 billion forints in development resources to the capital. He expressed confidence that the government and Budapest can reach a mutually beneficial solution. While the government focuses on economic stabilization, he said, the capital must also take a more active role in reducing regional inequalities. Navracsics acknowledged that although the solidarity contribution operates according to the law, there is now a broad consensus that the mechanism needs to be revised. The Association of County-Ranked Cities has already presented a concrete proposal for restructuring the system. The minister has been authorized to review municipal financing, the solidarity contribution, and taxation as part of the broader reform of the local government system. These topics will be discussed with mayors, county assembly presidents, and municipal associations beginning in January, and the capital’s mayor will also be invited. Asked whether he knows who his potential challengers might be in the Tapolca constituency, where he won by a wide margin in 2022, Navracsics said possible opponents include a senior physician from the Ajka hospital, an emergency medic from Sümeg, and an administrator from Tapolca. ‘They are all serious challengers; no candidate should be underestimated. I want to win,’ the minister said.
https://www.hungarianconservative.com/articles/current/budapest-economy-municipal-finance-negotiation-solidarity-contribution/
