Regional Report
Annex II: Crisis-management measures affecting local governments 2020-2023
published: 2023.06.30
Please cite as: K-Monitor (2023), Crisis-management measures affecting local governments in Czechia, Hungary, Poland and Romania 2020-2023, https://localgov2023.k-
1. Czechia
| Measure | Brief description | Status |
| New funding scheme for municipalities | Municipalities had to provide aid to small businesses, for which they were compensated in the form of non-purpose normative subvention through the Compensation Bonus Acts os 2020 and 2021. Each municipality recieved 1250 CZK per capita as compensation. Regions were left without state compensation in 2020, but were compensated in 2021. | Temporary, no longer in force, 2020-2021 |
| Delegating law enforcement duties to local authorities | The municipal police was allowed to prosecute offences related to government COVID restrictions, and fine offenders on the spot. The legislation providing this opportunity is still in force, however there are no national COVID-19 measures that could or should be enforced. | Temporary, still in force, 2020- |
| Limiting physical local council meetings | During a short, 2-week period, local assembly meetings could only be held if they had to deal with necessary matters (regarding the pandemic or legal deadlines) and these meeting could only be held in a remote manner. | Temporary, no longer in force, 2020 |
| Delegating the task of housing refugees to regional authorities | Act no. 65/2022 delegates the responsibility to provide accommodation to Ukrainian refugees to the Governers of Regions as well as the Mayor of Prague on their respective territory. Mayors of municipalities with extended competence and urban districts shall cooperate with the Governor in providing accommodation capacity. The regions are granted a compensatory contribution from the state for the accommodation of Ukrainian refugees. | Temporary, still in force, 2022- |
| Energy price caps | Government Regulation no. 298/2022 guarantees electricity and gas prices up to a certain level of consumption. The cap on energy prices is in effect from January 1st 2023 and is also effective for municipalities. | Temporary, still in force, 2023- |
2. Hungary
| Category | Brief description | Status |
| Limiting physical local council meetings | During a state of emergency, sessions of local councils (city and county) are suspended, mayors (or chairmen of the councils) are to act in place of the councils (except for a few competences, e.g. restructuring local institutions). | Temporary, no longer in force, 2020-2021 |
| Limitation on municipal financial autonomy | Local governments are not allowed to collect parking fees during the state of emergency. | Temporary, no longer in force, 2020-2021 |
| Limitation on municipal financial autonomy | Collection of local taxes related to tourism are suspended. | Temporary, no longer in force, 2020 |
| Extended administrative deadlines | The Government Decree on the state of emergency made possible for public institutions to extend the deadline provide requested data through FOI regulations from 15 to 45 days. The deadline can be prolonged for another 45 days. | Temporary, no longer in force, 2020-2022 |
| Creation of Special Economic Zones | The government can declare certain areas (related to investments above 5 billion HUF) as Special Economic Zones. Municipal functions on these zones are performed by county councils instead of city councils. | Permanent, 2020- |
| Limitation on municipal financial autonomy | A special tax on billboards and other outdoor advertising introduced before the 2018 elections, has been abolished in the summer of 2020. For larger municipalities (Budapest districts, cities with county rights) this leads to a significant loss of revenue on an annual basis. | Permanent, 2020- |
| Suspension of local referendums | With the adoption of the Authorization Act, all local and national by-elections and referendums were postponed until after the state of danger was revoked, which affected a number of by-elections. | Temporary, no longer in force, 2020-2022 |
| Limitation on municipal financial autonomy | Local tax rates are forbidden to exceed their 2020 values, new taxes are not allowed to be introduced (including no expansion of taxable persons or entities). | Temporary, no longer in force, 2020-2022 |
| Limitation on municipal financial autonomy | Entrerpreneurs and small and medium-sized enterprises only had to pay 50% of their Local Business Tax during 2021-2022. Municipalities with less than 25000 inhabitants were compensated for the exact loss of revenue generated by LBT benefits, larger municipalities must individually negotiate with the central government for their losses in 2021. The compensation was conducted in a politically biased manner. | Temporary, no longer in force, 2021-2022 |
| Limitation on municipal financial autonomy | The vehicle tax (levied by local tax authorities), formerly a shared tax with municipalities share equalling 40% is centralized and is now fully collected and used by the central budget. | Temporary, still in force, 2021- |
| Changes to sub-national redistributive tax | Tax capacity above which municipalities must pay solidarity contributions (to the municipal chapter of the central budget) was lowered significantly (from 32000 HUF to 22000 per capita, meaning more and less well-off municipalities are obliged to pay such contributions). As a result, around a quarter of all municipalities must pay solidarity constributions. The Municipality of Budapest is obliged to pay 15 times more taxes in 2024 than before the pandemic. | Permanent, 2021- |
| Centralization of assets | The ownership of a number of municipal properties are transferred without compensation. Several important public squares in Budapest were transferred into the ownership of the state and later to the government-affiliated 5th district. New legislation offers the opportunity for churches to claim the ownership of municipal institutions if they continue delivering the according public service (school, kindergarten, etc.). | Ongoing |
| Centralization of health care competences | Proposed legislation suggests the centralization of primary health care services from the municipal to the national level, including general practitioners’ offices and specialist clinics. | Under consideration, 2022- |
| Centralization of water infrastructure | The government has been increasing the financial pressure on municipalities to transfer their water infrastructure into national ownership, with many local governments complying and submitting their strategic infrastracture to the state without compensation. | Ongoing |
| War-related cost compensation | The government allocates additional funds for covering the war-related costs of municipalities, however, the 2022 budget allocation for the general tasks of municipalities is reduced with the same amount. | Temporary, no longer in force, 2022 |
| War-related cost compensation | Municipalities can apply for compensation when providing lodging for refugees, HUF 4000/person/night, increased to HUF 7000 from november 2022 (104/2022 govt. decree). | Temporary, still in force 2022- |
| Overhead cost compensation | The Hungarian government has decided to spend a total 44 billion forints (EUR 109.6m) helping local governments pay their energy bills. However, this was carried out bypassing the task-based financing scheme on a political basis. The Municipality of Budapest was not compensated at all for the rising costs of their obligatory tasks. | Temporary, no longer in force 2022-2023 |
| Limitation on municipal financial autonomy | During the state of danger, it is not possible for local governments to change the taxi tariff. The government refers to the armed conflict and humanitarian disaster taking place on the territory of Ukraine. | Temporary, still in force, 2023- |
| Limitation on public access to local decision-making | It is no longer necessary for city or county council members to appear in person at public hearings due to a government decree valid during the state of danger introduced in response to the Russian-Ukrainian war. It is also not mandatory to hold the customary yearly public hearing of city and county councils in person. | Temporary, still in force, 2023- |
| Overruling municipal decrees | Referring to the state of danger, the government issued a decree that a pro-government crony’s expired contract with the Budapest municipality is prolongued until the end of the state of danger. | Temporary, still in force, 2023- |
| Centralization of nursing care services | The central government discretionarily took over nursing care (a special form of early-childhood care) from the municipalities. The professional management will be the responsibility of the National Directorate General for Hospitals. Local governments provide the necessary movable and immovable property for the performance of the duties free of charge. | Permanent, 2023- |
| Change to the timing of local election | Local elections are traditionally held in the autumn, however in 2024 local elections are brought forward from September/October to June. Organizing the EU elections and local elections at the same time will make coordination among opposition parties more difficult. Additionally, no local by-elections can be organized between July 9th, 2023 and October 2024. | Ongoing |
3. Poland
| Measure | Brief description | Status |
| Suspension of deadlines in administrative and court proceedings | Deadlines of administrative and court proceedings were suspended as part of the Act of 2 March 2020, limited access to public information due to the interpretation of some authorities. Later, court has clarified, that this does not apply to proceedings regarding public information. | Temporary, no longer relevant 2020 |
| Limitation on public access to local decision-making | Justified by the increasing responsibilities and tasks of local governments during the pandemic, access to local government buildings and sessions were often limited by municipal bodies. This, as it was ruled by court, contradicts the constitution, and therefore is no longer allowed. | Temporary, no longer in force, 2020 |
| Local councils are allowed to conduct sessions remotely | Local councils have already been conducting sessions remotely for months when the central government allowed it through legislation. It had ambivalent effects on public participation and access to information. | Permanent, 2020- |
| New funding scheme for municipalities | The Government Fund for Local Investments distributes subsidies to local governments. Funds are automatically assigned to municipalities based primarily on population size or made available to local governments through a competitive grant procedure. Local government units, where the ruling coalition is more popular, tend to receive higher funding rate. After several installments, the fund was expended in 2022. | Temporary, no longer relevant 2020-2022 |
| Changes to sub-national redistributive tax | Janosikowe is the colloquial name of a compensatory subsidy transferred to local-government units characterised by a worse financial situation than the national average. It is determined by the central budget. The reduction of the amount of money distributed by this fund during the pandemic had negative effect on local financial autonomy. The government states that simplifying this “Robin Hood tax system” and using the pandemic tax income as the point of reference better match the current financial situation. | Permanent, 2021- |
| Limitation on municipal financial autonomy | The tax laws included in the Polish Order bill package lowered the direct personal tax, and thus it deprived local governments of their incomes and therefore increased their dependency on central government subsidies. | Permanent, 2022- |
| Centralization of education competences | The education reform (coined Lex Czarnek) would have given greater powers to school superintendents appointed by the education ministry. Centralization in education was an ongoing process even before the pandemic, and the government was mostly focusing on the legislative road (Lex Czarnek), and on usage of appointed education superintenders. On 2022 March 3rd, the President vetoed “Lex Czarnek” (it is unlikely that the ruling coalition won’t attempt some new “reform”). The President vetoed a second version of the reform in december 2022. The process is ongoing, but its intensity changes. | Under consideration, 2022- |
| War-related cost compensation | The government created an Aid Fund via the Bill of 12th March 2022 on the aid for Ukrainian citizens, which is the main instrument of financing additional tasks and obligations emerged due to the refugee crisis. Funds for housing and food for municipalities should be provided by the voivodes, according to the article 13 paragraph 2 of the Bill, and funds for additional tasks regarding education – by the Ministry of Education and Science (article 50 paragraph 4 of the Bill). The bill also makes it possible (altough not guaranteed) to raise general government education funding for municipalities. | Temporary, still in force, 2022- |
| Energy price caps | The government introduced several measures to contain rising energy prices. The coal benefit affected municipalities negatively as local authorities had to pay the subsidy of PLN 3000 per household. Electricity prices were frozen in October 2022 up to a certain level of consumption, where municipalities were among the beneficiaries. Later in 2022 gas prices were also frozen until the end of 2023. While municipalities no explicitly included, many public institutions managed by local authorities benefit from the price cap. | Temporary, still in force, 2022- |
| Overhead cost compensation | The Polish Government allocated an additional PLN 13.7 bln for municipalities to compensate for higher inflation, especially for higher energy prices. | Temporary, no longer in force, 2022 |
| Change to the timing of local election | President Andrzej Duda signed into law an Act extending the term of local governments until 30 April 2024. The ruling party has long planned to postpone local government elections, originally meant to take place in the autumn of 2023. Consequently, local elections (mayors, city councils, etc.) will have to occur no earlier than 31 March 2024 and no later than 23 April 2024. The original date would have been very close to the parliamentary elections, which will take in the second half of October 2023 or at the beginning of November 2023. Notably, most opposition parties voted against the proposal in the parliament, arguing that the law is unconstitutional. Moreover, the new date of the local elections will now clash with the European Parliament elections set to take place in May 2024. | Ongoing |
4. Romania
| Measure | Brief description | Status |
| Local councils are allowed to conduct sessions remotely | Legislation on the state of emergency allowed local councils to hold their meetings online. | Permanent, 2020- |
| Centralization of health care competences | By the Emergency Ordinance no. 40, Ministry of Health started to coordinate the organization and functioning of all health units under the authority of the local public administration and exercise the power to appoint, suspend and release from office the persons in charge of these establishments. | Temporary, no longer in force, 2020-2022 |
| Centralization of law enforcement competences | Local police was transferred under operational reporting to the Ministry of Internal Affairs. In March 2021, the original piece of legislation was modified in order to only allow for certain situation, such as a city under quarantine, in which the local police is under operational reporting to the MIA and not under local authorities, as ususal. | Temporary, no longer in force, 2020-2022 |
| Digitalisation of social assitance services | Digitalisation of the way in which some of the social benefits are requested at local level, introducing measures to electronically submit documents and do some bureaucratic procedures | Permanent, 2020- |
| Expanding financial autonomy at central and local level | The government introduces emergency ordinance no. 29 that allows for budgetary adjustments during the first half of 2020 and authorizes the transfer of budgetary and commitment credits during the state of emergency to combat the spread of COVID-19. The Ministry of Public Finance is given the authority to approve the quarterly distribution of these transferred credits based on communications from the main credit ordonators. | Temporary, no longer in force, 2020 |
| Alleviating financial pressure on municipalities | The government postpones the deadline for the collection and early payment of local (shared) taxes. | Temporary, no longer in force, 2020 |
| Change to the timing of local election | Local elections were originally scheduled for June 2020 but were delayed to September due to the COVID-19 pandemic. Emergency legislation also modified the election code. The decision might have been politically motivated. The Parliamentary elections were not rescheduled and ample campaigns and congresses were held prior to this round of elections. | One time only, 2020 |
| Existing funding schemes for municipalities used more extensively | Infrastructure development subsidies like the National Program for Local Development and the Anghel Salingny programme or the one distributed mainly to rural communes for covering debts are subsidies from the central budgets that can be seen as – partly politically motivated – compensatory mechanism that became more extensive during the pandemic. | Ongoing |
| Existing funding schemes for municipalities used more extensively | The government increased the volume of the politicized practice of distributing funds to municipalities through the Reserve Fund, a line item in the state budget to be used for emergency and unforeseen situations. While such a fund is necessary under emergency circumstances, the allocation of such funds goes without transparent criteria or solid legal basis. | Ongoing |
| Measures in response to war-related costs | Among other measures in response to the war in Ukraine, emergency ordinance no. 28/2022 states that private individuals who host foreign citizens or stateless individuals in special situations, coming from the armed conflict zone in Ukraine, can be compensated from the budget of the county inspectorates for emergency situations for the costs of food and accommodation. Local councils can approve the provision of aid to administrative-territorial units in Romania in extreme difficulty or to administrative-territorial units in neighboring states in a state of armed conflict or affected by the flow of people coming from the armed conflict zone in Ukraine. In local budgets, a budget reserve fund is established, which can be used for financing urgent or unforeseen expenses. While the measures nominally expand municipal financial autonomy no additional transfers from the central budget are allocated to cover the expenses. The measure is still in force with some changes over time to it. | Temporary, still in force, 2022- |