Elena Calistru (Funky Citizens): Companies in Bucharest are not interested in debates about the city's budget

Local elections are coming and the fight to spend Romania’s biggest local budget has started. BR talked to Elena Calistru, co-founder of Funky Citizens, one of the few specialists in public administration, in order to decipher where our taxes go.

By Oana Vasiliu

Where has spending most increased this year?

When you look over Bucharest’s local budget, you can definitely see some domains that receive more money every year: transportation, general public services and environmental protection. The biggest problem is that, every year, when you look at the evolution of spending, from what is forecast at the beginning of the year and what is reported at the end of the fiscal year, there are major differences. Also, the culture, education and recreation chapter has a recently increased budget, as a few weeks ago they amended the budget to give money to the Salvation Cathedral. The new multifunctional sports center, which will be constructed near the National Arena, is also included here, as well as the reconstruction of the national ice rink, in the same area.

One good example for Bucharest is the investment in transportation and infrastructure which most of the time has significant differences. This year, we’re also confronted with a specific situation regarding investment: all EU-funded projects that weren’t completed by the end of December 2015 are currently being financially supported by the local budget, at over RON 200 million, so they can be finished by June 30 when Romania was given the final deadline.

Who is the biggest contributor to the local budget?

Fortunately or unfortunately, the citizens. Some 71 percent of individual income tax goes to the local budget, out of which 45 percent goes to the City Hall budget. The budget is 60-70 percent represented by citizens’ contribution, followed by subsidies, especially those for hospitals, paid by the Ministry of Health, and quotas deducted from VAT. Basically, there is a very high dependence on the local budget compared to the state budget, and the situation of the last quarter of 2015 confirms it, at 92.5 percent. Although it is the city with the biggest budget of the country, Bucharest fails to generate economic revenues, such as concessions and rentals or EU funding.

Who are the participants in the public debates regarding Bucharest’s budget?

Some are simply citizens who come there to talk about a specific problem; some are citizens from initiative groups keen to change something in their neighborhood; NGOs, mostly those active in the environment and patrimony field and the supporters of bicycle transportation. What I find strange is that none of the companies doing business here are present at these debates, trying to negotiate better living conditions for their employees, especially because they could argue more powerfully as their contribution to the city is very significant.

What does the city hall subsidize? At what value?

The subsidies go to the Autonomous Administration of Heat Distribution Bucharest (RADET) and the Autonomous Transportation Enterprise of Bucharest (RATB) and the amount of money is incredibly high, over RON 1 billion.

Are there differences in budgeting for the institutions subordinate to city hall this year compared to 2015?

Some significant costs were cut for cemetery and crematorium administration, the Metropolis Theatre and Brancoveanu palaces. Otherwise, we hope that this year the offices of the city hall will return to their official building, the one on Elisabeta Boulevard, which has been undergoing restoration for several years now, and then the money spent on the current rent will be reinvested.

What are city hall’s most interesting investment goals this year?

Probably the most interesting is the wastewater treatment plant at Glina along with rehabilitation of the Dambovita collecting channel, an EU-funded investment (estimated at over RON 1 billion) which wasn’t finished on time, but still needs to be done. Only RON 40 million had been reimbursed by the end of 2015. What’s really interesting is that they budgeted consultancy for this project, at over RON 1 million, meaning that they are trying to find alternative solutions and funding for the project – international loans from EBRD or the European Investment Bank may be an option. Another objective, as I said, is to finally move back to the old building.

Photo courtesy of Daniel Vrabioiu / Funky Citizens

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