Autonomy in Bulgaria: considerable progress in decentralization, but a persistent lack of local financial autonomy

In the monitoring report presented today, the Congress of Local and Regional Authorities of the Council of Europe welcomes the significant progress made by Bulgaria in the application of the European Charter of Local Self-Government. However, it highlights several problems that persist in the area of ​​local financial resources and makes recommendations to improve the situation.

The report is based on remote meetings held in December 2020; the first remote Congress monitoring visit due to the COVID-19 pandemic.

“We have seen considerable progress made in Bulgaria through the implementation of a decentralization strategy and the devolution of powers and responsibilities to local authorities, particularly in the areas of education, public health and social services,” said one of the rapporteurs, Bryony Rudkin (UK, SOC/G/PD) introducing the report.

Other welcome developments include the institutionalization of several consultation procedures, the active participation of the National Association of Municipalities of the Republic of Bulgaria in the consultation and the ratification of the previously unratified provision of the Charter and the Additional Protocol. Thus, Bulgaria is now bound by all the articles of the Charter.

“We were also delighted to learn that during the state of emergency declared due to the pandemic, the powers of the municipalities were neither limited nor recentralised; the crisis headquarters was created and chaired by mayors,” Rudkin said.

However, as in many countries, the pandemic has also posed challenges for Bulgarian local authorities in terms of finances.

The second rapporteur, Randi Mondorf (Denmark, ILDG-ILDG) also noted that financial matters, in general, continue to pose problems in terms of compliance with the Charter, in particular its provisions on the local financial situation. While over the last decade municipal resources in Bulgaria have increased considerably, thanks to the improvement of the general economic situation, “the municipalities continue to take on a heavy load of tasks without sufficient funds; they lack commensurate financial resources to implement the delegated responsibilities”.

“The share of municipal resources coming from local taxes and fees remains extremely low,” Mondorf pointed out, with state transfers accounting for 64% of municipal revenues. “Fiscal and fiscal rules seem too restrictive for the budgetary autonomy of local authorities” and, overall, the system of municipal finances limits, in most cases, the freedom of local authorities to implement their own tasks, not to mention delegated functions.

The Congress invites the Bulgarian authorities to clarify the responsibilities attributed to the different levels of government, to widen the margin of appreciation of local authorities to adapt the exercise of delegated powers to local conditions, to reduce the dependence of local self-government on vis-à-vis financial transfers from the State by increasing the share of local taxes and charges in local revenues, and strengthening the taxing powers of local authorities, in general while simplifying local budgeting rules. The Congress also recommends that local authorities have a direct right of appeal to the Constitutional Court whenever a law violates their constitutional status, the Charter or both.

Teresa R. Cabrera

The author Teresa R. Cabrera