"We have municipalities with financial difficulties" - Requests of local representatives for the 2026 draft budget
From the implementation of the law on local finances to performance grants. These are some of the recommendations made by the Association of Municipalities of Albania, during a hearing at the Committee on Economy and Finance for the 2026 budget.
"The first demand is the implementation of the law on local finances. A 1% floor has been set and year after year only 1% has been based, our demand is to increase this percentage gradually, year after year. Unconditional sectoral transfer: with the increase in standards, additional funds must be provided for services.
For our part, the performance grant should continue, we propose to include it as a criterion in the formula. We continue to have municipalities with financial difficulties due to the debts that remained after the territorial division. 10 years after the territorial reform, the time has come to review the unconditional transfer formula.
The increase in the level of salaries is foreseen, in the item for the increase in salaries there are no clear criteria for how they were calculated. We should have a dedicated fund in the budget for investments, but these should not be competitive grants, because small municipalities are penalized.
"Review the removal of VAT for local governments, as municipalities withdraw from grants or projects. The law provides for 4% of the municipalities' budget for civil emergencies, it has never been implemented ," said Adelina Farrici, President of the Association of Municipalities of Albania.
Meanwhile, the head of the Institute of Municipalities, Agron Haxhimali, in his speech listed the 3 main challenges of local government.
Representatives of the association of local elected officials also outlined their demands, which mainly have to do with public debt, rural roads, and unconditional transfers.
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