Municipalities spend on the well-being of the population

"Don't tell me what you value, show me your budget, and I'll tell you what you value." - Joe Biden
ANDRUS JÕGI, ADVISER OF THE LOCAL GOVERNMENT FINANCIAL MANAGEMENT DEPARTMENT OF THE MINISTRY OF FINANCE

If the costs of all 79 municipalities in 2020 are added together, this makes a total of 2.46 billion euros. Such a large amount is difficult to comprehend. For example, 3 KUMU museums or almost 10 Tallink MyStar ships or about 14% of the Swedbank banking group could be acquired with this money. It is probably easier to grasp this amount of money if we look on it as how much it is per capita per month.

Municipalities spend 153 euros per capita per month. It is divided between many activities, but the largest part, 71 euros per month, is spent on education. Of this, 23 euros for kindergartens, 43 euros for general education and 4 euros for youth activities. Education expenditure accounts for almost half of the total expenditure of local governments. Although 23 euros per month for a kindergarten per capita seems a small amount, it makes about 430 euros per month for every child in kindergarten (of which the residents covered an average of 11% in fees). On second place is the economic sector, where 10 euros are spent on local roads and 7 euros on public transport. The rest is used to promote tourism and fund research and development.

Local government monthly expenditure per capita in 2020 (€):

Local government's spending per capita

Local governments spend 15 euros to promote people's recreation and culture. This includes support for the sports (eg sports halls), libraries, folk culture institutions, municipal theaters, etc. It allows us to enjoy a day at the Tallinn Zoo or to peek over the wall of the Narva Fortress across the border of Western civilization (S. P. Huntington's definition). Social protection is smaller in scope, but not less important. For many people, this is even critical. Benefits are provided, figuratively speaking, from birth to death - starting with birth and school allowance, paying subsistence allowance, if necessary, in the meantime and ending with home care service and funeral allowance.

General administration costs 11 euros per month, which mainly includes officials and other city and rural municipality government employees. They are the people necessary for organizing the services and development of local government - education specialists, social work officials, youth workers, environmental specialists, financial workers, lawyers, etc. and, of course, the mayor of municipality. It is their responsibility that the local services function correctly and that the local government develops in the direction determined by the council and as expected by the residents.

All other expenses in the municipality include mainly loan payments (6 euros per person per month), waste management, street cleaning, etc. (a total of 10 euros per person per month). Although personnel and maintenance make up the largest part of local government total costs (63%), in one way or another 25% of the total costs are investment related (building, investment grants, share acquisition).

All these benefits and services can be provided by local governments thanks to the contribution of taxpayers. The local government receives 83 euros per month per inhabitant from personal income tax, land tax and local taxes. The income tax paid by residents is the largest part of municipal revenue and therefore it is very important that each resident is registered correctly where they are living. In addition, 9 euros are received from the sale of goods and services for their residents (mainly the kindergarten fees). From state they will receive an additional 50 euros as grants. State grant includes the salary support for school teachers, funding for subsistence allowance, subsidies for local roads, kindergarten teachers, etc.

Local government monthly revenue per capita in 2020 (€):

Local government revenue per capita per month in 2020 (€)

*Note: the data used in the article have been taken from the website riigiraha.fin.ee as of 1 March 2021. The data for 2020 have not yet been audited.