Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 November 2024
In November 2024, the territorial budgets operated with a budget surplus of CZK 71.6 billion. Despite continued growth in revenue, the budget surplus fell year-on-year. The own revenues of territorial budgets, which strengthen their financial self-sufficiency, contributed significantly to the revenue growth. The growth was mainly driven by non-tax revenue, which increased significantly thanks to extraordinary income (the payment of creditors of Sberbank CZ). Tax revenues also increased year-on-year, thanks to higher receipts from VAT reflecting wage growth and changes introduced under the adjustment package. In contrast, corporate income tax collection recorded a decline, which was related to last year's high comparative base. There was a significant increase in property tax, which brought additional cash to municipalities.
On the expenditure side of the budgets, there was an increase in both current and capital expenditure. Current expenditure increased mainly due to contributions to an established contributory organization for roads, while capital expenditure increased due to investments in local government assets. The performance of local government budgets was also affected by the flood recovery operations caused by the Boris flood. Between September and November 2024, CZK 1.3 billion was spent on mitigating their damage and restoring infrastructure, with the largest damage recorded in the Olomoucký Region and the Moravian-Silesian Region. Most of these expenditures were compensated from the state budget and the state fund budget.
Despite the reduction in investment transfers, territorial budgets continued their investment activities, which shows their efforts to maintain the development momentum. The overall economic surplus confirms the stability and adaptability of territorial budgets to changing conditions.
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 November 2024, regions, municipalities and voluntary associations of municipalities managed a budget surplus of CZK 71.6 billion (see Chart No. 1). Year-on-year, the economic result decreased by 3.9%, i.e. by CZK 2.9 billion, due to a lower growth rate of the revenue side of territorial budgets caused mainly by a year-on-year decrease in investment transfers received. If the economic result is adjusted for direct expenditure on education and subsidies to private schools1, the budget balance reached CZK 50.6 billion and decreased by 22.3%, i.e. CZK 14.5 billion, year-on-year.
Total revenues of territorial budgets in November 2024 amounted to CZK 772.9 billion and increased by 1.6% year-on-year, i.e. by CZK 12.3 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 576.8 billion. Own revenues of territorial budgets reached CZK 480.9 billion and increased by 3.8% year-on-year, i.e. by CZK 17.4 billion. The self-sufficiency of territorial budgets, which represents the share of own revenue in total adjusted revenue2, was 83.4% in November. The year-on-year increase in own revenues was mainly due to non-tax revenues, which increased by 18.4%, i.e. by CZK 10.4 billion, to CZK 66.9 billion. This was mainly due to an increase in non-tax income from the payment of creditors of Sberbank CZ (year-on-year growth of 16.7%, i.e. CZK 10.3 billion). Furthermore, tax revenues grew by 1.3% year-on-year, i.e. by CZK 5.3 billion, and reached CZK 400.5 billion. On the other hand, there is a year-on-year decline in transfers received by territorial budgets. This was caused only by a decrease in investment transfers (down by 16.4%, i.e. by CZK 5.9 billion), which reached CZK 30.2 billion in November. Non-investment transfers received increased marginally year-on-year (by 0.2%, i.e. by CZK 0.5 billion) and reached CZK 241.5 billion.
The total expenditure of territorial budgets in November 2024 amounted to CZK 701.3 billion and increased by 2.1% year-on-year, i.e. by CZK 15.2 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 526.1 billion. Current expenditures reached CZK 558.4 billion and increased by 2.1% year-on-year, i.e. by CZK 11.4 billion, with the largest share of the year-on-year growth coming from non-investment contributions provided to established contributory organizations for roads. Capital expenditures climbed to CZK 142.9 billion in November and increased by 2.7% year-on-year, i.e. by CZK 3.7 billion, due to an increase in the purchase of property shares of local governments.
Management of regions
In November, the regions managed a budget surplus of CZK 29.6 billion. As can be seen from Chart No. 2, the budget balance increased by 18.9% year-on-year, i.e. by CZK 4.7 billion. If we adjust the budget balance of the regions for direct expenditure on education and subsidies for private schools1, the result of the budget then reached CZK 11.8 billion2 and even decreased by 24%, i.e. by CZK 3.7 billion year-on-year.
Total regional revenues in November amounted to CZK 332.7 billion and increased slightly year-on-year (by 0.5%, i.e. by CZK 1.7 billion). After adjusting regional revenues for direct expenditure on education and subsidies to private schools1, revenues amount to CZK 161.2 billion. At the end of the year, own revenue of the regions continued to grow. In November, they reached CZK 112.1 billion (6.1% year-on-year growth, i.e. CZK 6.4 billion) and accounted for 69.6% of total adjusted revenue2. The regions' own revenues strengthened year-on-year due to the growth of non-tax revenues (by 37.5%, i.e. by CZK 4.2 billion), which reached CZK 15.4 billion in November, mainly due to the payment of creditors of Sberbank CZ. Furthermore, tax revenues increased year-on-year by 2.3%, i.e. by CZK 2.1 billion, to CZK 96.3 billion.
At the end of November 2024, the regions had received transfers amounting to CZK 220.6 billion. Year-on-year, they received 2.1%, i.e. CZK 4.7 billion less, which was caused only by a decrease in investment transfers. Non-investment transfers received by the region in November 2024 amounted to CZK 209.4 billion and increased by 1.6% year-on-year, i.e. CZK 3.3 billion. Investment transfers received by the region amounted to CZK 11.1 billion in November and fell by 41.9% year-on-year, i.e. by CZK 8 billion.
The total expenditure of the regions in November 2024 amounted to CZK 303.1 billion and decreased by 1% year-on-year, i.e. by CZK 3 billion. Adjusting for direct education spending and subsidies to private schools1, expenditure is CZK 149.4 billion. The year-on-year decline in total expenditure was driven only by capital expenditure, which fell by 16.7%, i.e. by CZK 7.2 billion, to CZK 35.7 billion. The significant year-on-year decline in investment activities of regions corresponds to the decrease in investment transfers received. The year-on-year decrease in capital expenditure is mainly due to a reduction in expenditure on the acquisition of railway vehicles. In contrast, current expenditure increased by 1.6% year-on-year, i.e. by CZK 4.1 billion, to CZK 267.4 billion. This was mainly due to non-investment transfers provided to established contributory organizations for roads. Transfers made by regions to contributory and similar organizations amounted to CZK 197.7 billion and accounted for 74 % of total current expenditure. Most of these funds were earmarked for direct expenditure on education.
The economy of some regions was affected in November by floods caused by the Boris pressure low. In connection with this, in November 2024, the counties made expenditure directly related to the preparation and management of emergency situations and to the recovery from the damage caused by the floods in the amount of CZK 322.6 million. CZK. As of September, these expenditures have risen to CZK 611.4 million.
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 November, the municipalities managed a positive budget balance of CZK 40.7 billion (see Chart No. 3). The budget result decreased year-on-year (by 17.1%, i.e. by CZK 8.4 billion) due to a faster growth rate of expenditure, mainly due to the growth of investment expenditure. In November, the Prague City budget ended in a surplus of CZK 23.6 billion (5.5% year-on-year decrease, i.e. CZK 1.4 billion) with total revenues of CZK 127.1 billion and expenditures of CZK 103.5 billion. Excluding Prague, total municipal revenues amounted to CZK 321.9 billion, expenditures to CZK 304.8 billion and the budget result ended in a surplus of CZK 17.1 billion.
Total municipal revenues in November 2024 amounted to CZK 448.9 billion and increased by 2.5% year-on-year, i.e. by CZK 11 billion. After adjusting municipal revenues (Prague) for direct expenditure on education and subsidies to private schools1, revenues amount to CZK 424.3 billion. At the end of the year, own revenue of municipalities continued to grow. In November, they reached CZK 367.4 billion (year-on-year growth of 3.1%, i.e. CZK 11 billion) and accounted for 86.6% of total adjusted revenues2. Own revenues strengthened year-on-year mainly due to the growth of non-tax revenues, which increased by 12.4%, i.e. by CZK 6.1 billion, to CZK 55.5 billion, mainly due to the payment of creditors of Sberbank CZ. Furthermore, tax revenues increased year-on-year (up by 1%, i.e. by CZK 3.1 billion), reaching CZK 304.2 billion in November.
At the end of November, municipalities received transfers in the total amount of CZK 81.5 billion, almost unchanged year-on-year. The decrease in transfers was caused by a year-on-year decline in non-investment transfers (down by 3.6%, i.e. by CZK 2.3 billion), which amounted to CZK 60.9 billion. Investment transfers received by municipalities increased by 12.3%, i.e. by CZK 2.3 billion year-on-year, to CZK 20.6 billion.
Total municipal spending in November 2024 amounted to CZK 408.2 billion and increased by 5% year-on-year, i.e. CZK 19.4 billion. After adjusting municipal (Prague) spending for direct education spending and subsidies to private schools1, spending is CZK 386.8 billion. The year-on-year growth was mainly due to an increase in capital expenditure, which increased by 12%, i.e. by CZK 11.6 billion, to CZK 108.6 billion, compared to the previous year. This was mainly due to expenditure on the purchase of equity shares. Municipalities' current expenditure reached CZK 299.6 billion, up by 2.7% year-on-year, i.e. by CZK 7.8 billion. The year-on-year increase in current expenditure was mainly due to an increase in expenditure on salaries of employees in employment, excluding employees in local government posts.
In November, the municipalities were affected by the floods caused by the Boris pressure low. As a result, in November 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 371.9 million CZK. As of September, this expenditure had risen to CZK 695.3 million. CZK. The floods caused the most damage in the municipalities of the Moravian-Silesian Region.
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 November 2024, voluntary associations of municipalities managed total revenues of CZK 6.4 billion (year-on-year growth of 30.3%, i.e. CZK 1.5 billion) and total expenditures of CZK 5.2 billion (year-on-year growth of 14.3%, i.e. The budget balance ended in a surplus of CZK 1.3 billion (year-on-year growth of CZK 0.9 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.