Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 April 2024
Territorial budgets continue to generate record budget surpluses at the end of April this year. Good financial condition is indicated by the budget surplus of CZK 29.8 billion. The positive situation of regions and municipalities is supported by price stability and prosperity of the domestic economy. Inflation reached 2.9%, but it was still within the upper limit of the tolerance band of the Czech National Bank. The Czech economy is returning to growth and nothing should change for the rest of the year. According to the latest prediction of the Ministry of Finance, economic growth will reach 1.4% in 2024 and 2.6% next year. Economic recovery combined with wage growth had a positive impact on the increased collection of income taxes and VAT revenues. This led to the strengthening of the growth of own incomes of regions and municipalities, which make up the majority of incomes of territorial budgets. The growth also occurred on the side of non-tax revenues. The weakening occurred only in non-investment transfers received by territorial budgets. On the other hand, significant growth was recorded in investment transfers, which rose year-on-year to record levels. Despite this, investment activity of the regions year-on-year fell.
Management of Local Governments
In April 2024 municipalities, regions and voluntary associations of municipalities operated with a budget surplus of CZK 29.8 billion (year-on-year an increase by 149.1%, i.e. CZK 17.9 billion) and reported the highest surplus budget balance since April 2014 (see Chart No. 1). If we reduce the budget balance by the direct expenditures of education and subsidies for private schools1, the economic surplus reached CZK 29.4 billion and increased by 153.5% year-on-year, i.e. by CZK 17.8 billion.
The total revenues of local budgets reached CZK 268.2 billion in April 2024 and increased by 8%, i.e. by CZK 19.8 billion. Adjusted total revenues1 amounted to CZK 199.2 billion. Their own revenues amounted to CZK 163 billion and increased by 13.3% in comparison with last year, i.e. by CZK 19.1 billion. This growth was caused by a rise in non-tax revenues, which reached CZK 32.1 billion and increased by 49.8%, i.e. by CZK 10.7 billion. Transfers received by territorial budgets in April 2024 increased only marginally and reached CZK 105.2 billion. This increase was only due to investment received transfers, which rose by 76.4% year-on-year, i.e. by CZK 4.5 billion, to CZK 10.3 billion. On the contrary, non-investment received transfers decreased by 3.9% year-on-year, i.e. by CZK 3.8 billion and reached CZK 94.8 billion.
The total expenditures of local budgets in April 2024 amounted to CZK 238.4 billion and increased by 1% in comparison with last year, i.e. by CZK 1.9 billion. Adjusted total expenditures1 amounted to CZK 169.8 billion. The current expenditures in April amounted to CZK 208.7 billion (year-on-year growth of 0.8%, i.e. CZK 1.6 billion), while the dominant part of it was represented by transfers that regions and municipalities transfer to contributory organizations and similar organizations. The capital expenditures reached CZK 29.6 billion (year-on-year growth of 1.3%, i.e. CZK 0.4 billion).
Management of regions
In April 2024, the regions managed a positive budget balance of CZK 10.5 billion and continue this year to generate the highest economic surpluses since 2014. The budget surpluses was almost twenty times the surplus reported last year, when it was CZK 0.5 billion (see Chart No. 2). If we reduce the budget balance by the direct expenditures of education and subsidies for private schools1, the economic surplus reached CZK 10.2 billion (year-on-year growth of CZK 9.9 billion).
The total revenues of the regions in April 2024 amounted to CZK 123 billion and increased by 8%, i.e. by CZK 9.1 billion. Adjusted total revenues1 reached CZK 62.9 billion. Their own income reached CZK 40.1 billion (year-on-year increase by 23.6%, i.e. by CZK 7.6 billion) and represent 63.7% of total income adjusted for direct education expenditures. The regions' own revenues are repeatedly strengthening mainly due to the growth of non-tax revenues, which in April of this year increased by 136.2% year-on-year, i.e. by CZK 5 billion, to CZK 8.7 billion. In April 2024, the tax revenues increased by 9.4%, i.e. CZK 2.7 billion, to CZK 31.3 billion. Regions received transfers in the amount of CZK 82.9 billion, i.e. by 1.7%, i.e. by CZK 1.4 billion more against last year. The increase was due only to investment transfers, which increased by 112.8 % year-on-year, i.e. CZK 2.7 billion, to CZK 5 billion. Non-Investment transfers received by the region decreased year-on-year of 1.6%, i.e. by CZK 1.3 billion to CZK 77.9 billion in April this year.
The total expenditures of the regions in April 2024 amounted to CZK 112.5 billion and decreased by 0.8% compared to last year, i.e. by CZK 0.9 billion. Adjusted total expenditures1 reached CZK 52.8 billion. This decrease was due only to capital expenses, which fell by 12.3% compared to last year, i.e.by CZK 1 billion, to CZK 7.5 billion. In April 2024 current expenditures increased only by 0.1%, i.e. by CZK 0.1 billion, to CZK 105 billion. The transfers that the regions transferred to contributory and similar organizations reached CZK 75.7 billion and represented 72% of current expenses. Most of these funds were intended for direct education expenditures.
The balances on bank accounts and the debt of regions are only available for March 20242 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 March 2024.
Management of Municipalities
In April of this year, municipalities managed budget balance surplus of CZK 18.4 billion. Year-on-year, the economic result increased almost two times (see Chart No. 3). Without the capital city, the total revenues of the municipalities in April amounted to CZK 107.4 billion, the total expenses to CZK 96.1 billion, and the result of budget management ended in a surplus of CZK 11.4 billion. Budget of the city of Prague ended up with a surplus of CZK 7 billion, with total revenues of CZK 40.9 billion and expenses of CZK 33.8 billion.
The total revenues of municipalities in April 2024 reached CZK 148.3 billion and increased by 7.5%, i.e. by CZK 10.4 billion compared to April 2023. Adjusted total revenues1 reached CZK 139.3 billion. Their own income amounted to CZK 122.5 billion (year-on-year growth of 10.2%, i.e. by CZK 11.4 billion) and represented 87.9% of total adjusted income. Own revenues are repeatedly strengthening, especially due to the growth of non-tax revenues, which in April of this year increased by 32% year-on-year, i.e. by CZK 5.6 billion, to CZK 22.9 billion. At the end of April this year, municipalities received transfers in the total amount of CZK 25.8 billion and year-on-year they received them by 3.8%, i.e. by CZK 1 billion less. Non-investment transfers, which amounted to CZK 20.6 billion at the end of April, decreased year-on-year by 11.3%, i.e. by CZK 2.6 billion. Investment transfers received by municipalities significantly increased year-on-year by 46.5%, i.e. by CZK 1.6 billion, to CZK 5.1 billion.
The total expenditures of municipalities in April 2024 amounted to CZK 129.9 billion and increased by 2.3 %, i.e.by CZK 2.9 billion compared to last year. Adjusted total expenditures1 reached CZK 121 billion. The year-on-year growth of total expenses was mainly caused by capital expenses, which increased by 7.3% compared to last year, i.e.by CZK 1.5 billion, to CZK 22.3 billion. In April 2024 current expenditures also increased by 1.3%, i.e. by CZK 1.4 billion, to CZK 107.6 billion. The transfers that the regions transferred to contributory and similar organizations reached CZK 29.1 billion and represented the majority of current expenses.
The balances on bank accounts and the debt of municipalities are only available for March 20242 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 March 2024.
Voluntary associations of municipalities
In April 2024, voluntary associations of municipalities reported total revenues of CZK 2.2 billion (year-on-year an increase of 34.2%, i.e. CZK 0.6 billion) and total expenses of CZK 1.3 billion (year-on-year an increase of 11.5%, i.e. by CZK 0.1 billion). The budget balance ended in a surplus of CZK 0.9 billion (year-on-year growth by CZK 0.4 billion).
1 The direct expenditures of education and subsidies for private schools represent funds from the state budget, which are distributed and directly allocated to the schools and school facilities by regions and Prague. It is therefore a non-investment flow transfer and the region and Prague cannot dispose of these funds in any way. For this reason, the total revenues and expenditures of the regions and Prague are reduced so not to distort their results of management.
2 The balance on bank accounts and debt are available from the financial statements, which are submitted to the Central State Accounting Information System on a quarterly basis.