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Public transport funding bill to squeeze Budapest’s budget

About a month after losing Budapest to the opposition, the government submitted a proposal related to public transport funding, which would considerably reduce Mayor Gergely Karácsonyʼs powers over the capitalʼs budget, according to multiple reports.

Bloomberg.com says that the bill would force Budapest to spend the USD 500 million a year it collects in business tax receipts on the public transport system.

"We will lay down in a law that the local trade tax must be used primarily for financing local public transport,” Minister of State for Public Administration of the Prime Minister’s Office Bence Tuzson said, according to a report by kormany.hu. He added that the capital would only be permitted to use any part of these tax revenues after public transport spending has been guaranteed.

“If [former Mayor of Budapest] István Tarlós was able to finance the capital’s public transport, Gergely Karácsony, too, should be able to do so,” he said.  

However, news site hvg.hu says that Budapest received some HUF 12 billion from the government as public transport funding support in 2018. Additionally, BKK (Center for Budapest Transport) was given HUF 15 bln as direct compensation for money lost after concessionary fares. The municipality provided some HUF 73.9 bln of funding out of its own pockets during Tarlósʼs last full year. 

Karácsony called on the government to withdraw the bill. He also said that Orbán should not backtrack on pledges to work in partnership with local councils, even where the governing party was defeated.

According to Bloomberg, Deputy Mayor Ambrus Kiss said the legislation could put the city in a tight spot. “This could open the door for the government to financially squeeze Budapest,” Kiss said, adding that the city now spends half of its business-tax income on buses, trams and the metro. “But at this point we’re just trying to understand what the government’s purpose is."