South Moravian Region Faces Budget Cuts Due To Deficit of Over CZK 1 Billion
The Council of the South Moravian Region has approved an amendment to the region’s budget after an expected shortfall of more than CZK 1 billion in revenue from shared taxes. The amendment includes reduced funding for regional events and the accessing of reserve funds from previous years, as well as the use of unexpected excess revenues. Photo credit: Tomas Hajek / KrU JMK.
Brno, Jun 10 (BD) – At a meeting on Monday, the Council of the South Moravian Region approved an amendment to the regional budget for 2020, in connection with a shortfall of more than CZK 1 billion in revenue from shared taxes. The amendment has not yet been approved by deputies.
“The changes in the budget are to find resources to cover the shortfall in revenue from shared taxes, which, according to the forecast by the Ministry of Finance, amounts to more than CZK 1 billion,” said Governor Bohumil Simek. “At the same time, the council proposed the creation of reserves in the budget to cover possible further shortfalls in revenue, and to cover increased costs in connection with the COVID-19 pandemic.”
The region intends to cover the shortfall with revenues received in excess of the 2020 budget to the amount of CZK 60 million, reducing this year’s budget expenditure by CZK 988 million, and employing monetary funds saved from previous years to the amount of CZK 40 million.
According to Simek, the council looked for savings in both operating expenses and expenditure in specific areas. He said that the council is not looking to restrict or reduce investment, as it would affect employment in the region. They therefore looked instead at events for which the region had planned financial support, such as the Olympic Festival, which was to take place in Brno this summer, and Village of the Year. The council then decided which projects to support in full, and which projects could have funding postponed until next year without threatening successful implementation.
Revenues received in excess of the 2020 budget include, in particular, higher expected revenues from projects financed by the EU, revenue from land sales, and the return of subsidies made on the basis of financial settlement.
“We also intend to create a reserve to address the coronavirus outbreak, of CZK 282 million. This reserve will be used in particular to cover further possible shortfalls in revenue and increased expenses that the region has yet to incur in connection with the COVID-19 pandemic,” added Simek. These include increased expenditure on protective equipment and transport services in the region.