Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 October 2024
In October 2024, the territorial budgets operated with a budget surplus of CZK 51.8 billion. Slower revenue growth and a faster growth rate of expenditure led to a year-on-year decline in the outturn. However, territorial budgets' own revenues recorded solid growth, which again strengthened their financial self-sufficiency. Non-tax revenue, which increased significantly during the year thanks to exceptional revenue (payment of Sberbank CZ creditors), and tax revenue, which benefited from positive changes in the economic environment, were key contributors to this development.
For taxes, the key drivers were an increase in the collection of VAT, reflecting rising wages and consolidation measures, and higher VAT collection due to an increase in household consumption. In contrast, DPPO collections declined year-on-year, reflecting advance tax payments. The real estate tax recorded a significant increase, bringing additional funds to municipalities. On the other hand, non-investment transfer receipts decreased year-on-year, mainly due to lower compensatory allowances for regions for accommodation of persons from Ukraine and for municipalities due to a decrease in funds received from the Jan Amos Komenský Operational Program. Although territorial budgets received fewer investment transfers year-on-year, especially from the Integrated Regional Operational Program, they did not slow down their investment activities and development projects.
The expenditure side of the budget was affected by the floods that hit the Czech Republic. These events led to unplanned expenditure, especially in the most affected areas, where it was necessary to cover the damage and ensure the reconstruction of infrastructure. In connection with the preparation for and handling of crisis situations and the repair of the damage caused by the Boris flood, the territorial budgets have incurred expenditure of CZK 576.4 million since September. CZK. The most affected region was the Olomoucký Region, where the expenditure of municipalities and the region in connection with the floods amounted to CZK 278.6 million.
Detailed information is provided in the Monitor system (data for territorial budgets can be obtained in the Analytical section under Local organisations).
Management of Local Governments
In October 2024, regions, municipalities and voluntary associations of municipalities reported a positive budget balance of CZK 51.8 billion (see Chart No. 1), which decreased year-on-year by 18.3% year-on-year, i.e. by CZK 11.6 billion. This was due to a lower growth rate of the revenue side of territorial budgets caused by lower year-on-year growth in tax revenues and a year-on-year decrease in transfers received. If the economic result is adjusted for direct expenditure on education and subsidies to private schools1, the budget balance reached CZK 51.4 billion and decreased by 18.4%, i.e. CZK 11.6 billion, year-on-year.
Total revenues of territorial budgets in October 2024 amounted to CZK 694.1 billion and increased by 0.9% year-on-year, i.e. by CZK 6.2 billion. After adjusting the revenues of regions and municipalities (in the case of the capital city of Prague) for direct expenditure on education and subsidies to private schools1, revenues amount to CZK 528.3 billion. Own revenues of territorial budgets reached CZK 441.9 billion and increased by 4.4% year-on-year, i.e. by CZK 18.5 billion. The self-sufficiency of territorial budgets, which represents the share of own revenue in total adjusted revenue2, was 83.7% in October. The year-on-year increase in own revenue is mainly due to non-tax revenue, which increased by 18.4%, i.e. by CZK 10.4 billion, to CZK 66.9 billion. Furthermore, tax revenues, which grew by 1.9%, i.e. by CZK 7 billion, to CZK 368.2 billion. Transfers received by territorial budgets fell by 4.8% year-on-year, i.e. by CZK 12.6 billion, to CZK 252 billion. This was due to a decrease in non-investment transfers (down by 3.3%, i.e. by CZK 7.6 billion), which reached CZK 225.9 billion in October, but also due to a decrease in investment transfers (down by 16.1%, i.e. by CZK 5 billion) and reached CZK 26.1 billion in October.
The total expenditure of territorial budgets in October 2024 amounted to CZK 642.3 billion and increased by 2.9% year-on-year, i.e. by CZK 17.8 billion. After adjusting the expenditure of regions and municipalities (in the case of the capital city of Prague) for direct expenditure on education and subsidies to private schools1, expenditure amounts to CZK 476.9 billion. Current expenditures amounted to CZK 517.1 billion and increased year-on-year (by 2.9%, i.e. by CZK 14.4 billion), due to a year-on-year increase in non-investment contributions to established contributory organizations for roads. Capital expenditure amounted to CZK 125.2 billion in October and increased by 2.8% year-on-year (i.e. by CZK 3.4 billion), due to an increase in the purchase of local government shares.
Management of regions
At the end of October, the regions managed a budget surplus of CZK 11.6 billion. As can be seen from Chart No. 2, the economic result decreased by 24.7% year-on-year, i.e. by CZK 3.8 billion. Year-on-year, the economic result increased by 49.1%, i.e. by CZK 10.6 billion (see Chart No. 2). If the budget balance of the regions is adjusted for direct expenditure on education and subsidies to private schools1, the economic result then reached CZK 11.3 billion and increased year-on-year by 25.1%, i.e. by CZK 3.8 billion.
Total regional revenues at the end of October 2024 achieved CZK 293.8 billion and in comparison, with last year decreased slightly (fell by 1.2%, i.e. by CZK 3.6 billion). After adjusting regional revenues for direct expenditure on education and subsidies to private schools1, revenues amount to CZK 176.1 billion. During the year, the regions' own revenue has been growing systematically. In October, own revenue reached CZK 102.7 billion (up 6.8% year-on-year, i.e. by CZK 6.5 billion) and accounted for 58.4% of total adjusted revenue2. Own revenue strengthened year-on-year in October mainly due to the growth of non-tax revenues (45.3% year-on-year growth, i.e. by CZK 4.5 billion), which reached CZK 14.4 billion. It was also due to the growth in tax revenue, which increased by 2.4% year-on-year, i.e. by CZK 2.1 billion, to CZK 88 billion.
In October 2024, the regions received transfers in the amount of CZK 191.1 billion, i.e. 5.1%, i.e. CZK 10.2 billion less than in the previous year. Year-on-year, non-investment transfers received by the regions decreased by 1.5%, i.e. by CZK 2.8 billion and reached CZK 181.2 billion. Investment transfers received by the region amounted to CZK 9.9 billion in October this year and decreased by 42.8%, i.e. by CZK 7.4 billion year-on-year.
The total expenditure of the regions in October 2024 amounted to CZK 282.2 billion and increased by 0.1% year-on-year, i.e. by CZK 0.2 billion. Adjusting for direct education spending and subsidies to private schools1, expenditure is CZK 164.8 billion. The year-on-year decline in total expenditure was driven exclusively by capital expenditure, which fell by 17.6%, i.e. by CZK 6.6 billion, to CZK 31.1 billion. The significant year-on-year decline in investment activities of regions corresponds to the decrease in investment transfers. The year-on-year decrease in capital expenditure was mainly due to a reduction in expenditure on the acquisition of railway vehicles. In contrast, current expenditure increased by 2.8% year-on-year, i.e. by CZK 6.8 billion, to CZK 251.2 billion. This was mainly due to non-investment transfers to established contributory organizations for roads. Transfers made by regions to contributory and similar organizations amounted to CZK 187.8 billion and accounted for 74.8% of total current expenditure. Most of these funds were earmarked for direct expenditure on education.
In October, the regional economy was affected by the floods caused by the Boris pressure low. As a result, in October 2024, the regions made expenditures directly related to the preparation and management of emergency situations and to the repair of damage caused by floods in the amount of CZK 254.4 million. CZK. Since September, this expenditure has reached CZK 278.8 million. CZK. The floods caused the most damage in the Olomoucký Region, whose flood-related expenditures exceeded CZK 222.9 million. CZK.
The balances on bank accounts and the debt of regions are only available for September 20243 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 September 2024.
Management of Municipalities
In October 2024, municipalities reported a positive budget balance of CZK 39.1 billion. As can be seen from Chart No. 3, the economic result decreased year-on-year (by 17.6%, i.e. by CZK 8.3 billion), due to a faster growth rate of expenditure than revenue. The Prague City Budget ended October with a surplus of CZK 19.2 billion (a year-on-year decrease of 16.3%, i.e. CZK 3.7 billion) with total revenues of CZK 114.8 billion and expenditures of CZK 95.6 billion. Excluding the capital city, total municipal revenues amounted to CZK 293.8 billion, expenditures to CZK 274 billion and the budget result ended in a surplus of CZK 19.8 billion.
Total municipal revenues in October 2024 amounted to CZK 408.6 billion and increased year-on-year by 2.6%, i.e. by CZK 10.3 billion. After adjusting municipal revenues (Prague) for direct expenditure on education and subsidies to private schools1, revenues amount to CZK 388.2 billion. During the year, there is a systematic growth of own revenue of municipalities, which at the end of October amounted to CZK 337.9 billion (year-on-year growth of 3.7%, i.e. CZK 12 billion) and accounted for 87% of total adjusted revenue2. Own revenues strengthened year-on-year mainly due to the growth of non-tax revenues, which increased by 13.2%, i.e. by CZK 6 billion, to CZK 51.3 billion. Furthermore, tax revenue increased by 1.8%, i.e. by CZK 4.9 billion, to CZK 280.2 billion.
At the end of October, municipalities received transfers in the total amount of CZK 70.8 billion, down by 2.3%, i.e. by CZK 1.6 billion year-on-year. The decrease in transfers was caused by a year-on-year decline in non-investment transfers (down by 7.2%, i.e. by CZK 4.2 billion), which amounted to CZK 53.3 billion. Investment transfers received by municipalities increased by 16.9%, i.e. by CZK 2.5 billion year-on-year, to CZK 17.5 billion.
Total municipal expenditure in October 2024 amounted to CZK 369.6 billion and increased by 5.3% year-on-year, i.e. CZK 18.7 billion. After adjusting municipal spending (Prague) for direct education spending and subsidies to private schools1, spending amounts is CZK 349.2 billion. The year-on-year growth was mainly due to an increase in capital expenditure, which increased by 12.5%, i.e. by CZK 10.6 billion, to CZK 95.2 billion compared to the previous year. This was mainly due to expenditure on the purchase of equity interests. The current expenditure of municipalities reached CZK 274.3 billion and increased by 3% year-on-year, i.e. by CZK 8.1 billion. The year-on-year increase in current expenditure is mainly due to an increase in expenditure on roads for the purchase of other services.
In October, the municipalities were affected by the floods caused by the Boris pressure low. As a result, in October 2024, municipalities made expenditures directly related to the preparation and management of emergency situations and to the repair of flood damage in the amount of CZK 277.7 million. CZK. As of September, this expenditure had risen to CZK 323.4 million. CZK. The floods caused the most damage in the municipalities of the Moravian-Silesian Region, whose flood-related expenditures exceeded CZK 207.2 million. CZK.
The balances on bank accounts and the debt of municipalities are only available for September 20243 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 September 2024.
Voluntary associations of municipalities
In October 2024, the voluntary associations of municipalities managed total revenues of CZK 5.8 billion (year-on-year growth of 30.4%, i.e. CZK 1.3 billion) and total expenditures of CZK 4.7 billion (year-on-year growth of 19.1%, i.e by CZK 0.7 billion). The budget balance ended in a surplus of CZK 1.1 billion (year-on-year growth of CZK 0.6 billion).
1 The direct costs 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 expenses of the regions and Prague are reduced so not to distort their results of management.
2 Total revenue net of revenue from transfers for direct expenditure on education and from subsidies to private schools.
3 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.