RIGA, Sept 26 (LETA) - The budgets of local governments will increase by EUR 220-230 million next year compared to this year, said Inga Berzina (New Unity), Minister of Smart Administration and Regional Development, in an interview with Latvian Radio, commenting on the agreement on the priorities of next year's state budget that was approved by the Government.

"If we look at the percentage change, it is a 10 percent increase compared to last year," the minister said. The smallest increase among municipalities will be 7 percent, which is still significantly higher than in the previous programming period, when some municipalities initially had budget increases of only 1-2 percent before the Equalization Fund.

"So for next year, although the overall budgetary situation in the country is not straightforward, the needs of municipalities have been taken into account and municipalities can feel relatively secure," the official assessed.

She also stressed that the State will guarantee the municipalities the revenues that are planned for next year from the personal income tax (PIT). "In addition, this compensation amounts to around EUR 149 million," Berzina said.

Asked how the municipalities feel this financial year and whether they are able to fulfill their basic functions, the Minister replied that during this year, municipalities have received a total of around EUR 100 million on the back of the tax overpayment, which has allowed them to feel more stable and, in general, all municipalities are now able to fulfill their basic functions, Berzina confirmed.

As reported, the government last week endorsed the budget allocation for priority measures in 2025.

Taking into account that the planned changes in tax policy will have an impact on the budgets of local governments, a special grant of almost EUR 149.6 million is foreseen for local governments to carry out their autonomous functions.