Mayor Criticizes the Polish Deal in a Well-Known Magazine. Municipality’s Losses: Over PLN 1 Million

Waldemar Nalazek, head of Osiecznica Municipality, gave an interview to Wspólnota, the country’s leading periodical addressed to local-government officials. Asked about the loss of over PLN 1 million (according to calculations by the minister of finance), the mayor replied:

Indeed, the difference between PIT revenue collected last year and the forecast for 2022 presented by the minister of finance is approximately PLN 1 million. It should be remembered, however, that in previous years, PIT tax revenue had been steadily increasing, so the actual loss is another dozen or so percent higher. Because of this situation, we received a supplementary subsidy of PLN 732,000, but this does not cover our loss, since PIT revenue and the supplementary subsidy together amount to approximately 95% of last year’s revenue from this source. There is an additional problem with the supplementary subsidy, because we do not know whether it will be a systemic measure or a one-off transfer. In total: last year, the municipality received PLN 6.839 million from its share of PIT, while the forecast for the current year is PLN 5.813 million. Given that there were no local circumstances that would cause a decline in the municipality’s share of personal income tax, the answer is obvious.

He immediately added that the Association of Rural Municipalities of the Republic of Poland, of which Osiecznica Municipality is a member, is monitoring the situation and holding talks with the Ministry of Finance.

He also commented:

Personally, I believe that since some Polish Deal regulations are currently being modified, this should also be used to make municipalities’ revenues more realistic by increasing their percentage share of PIT.

The head of the municipal government emphasizes that Osiecznica’s situation is not dramatic, because the municipality has built up a budget surplus. But

[...] there is a problem with current expenditure, which is rising because of inflation and wage pressure. Raising the minimum wage in the public sector has greater financial consequences than in private enterprises, because along with the base salary we must proportionally increase seniority allowances, additional annual salaries, and so on. We feel this most acutely in education.

He also stressed that, in his view, the government should provide funding for teachers’ salaries and pay them directly, as is the case in many European countries.

The full interview can be read on wspolnota.org.pl.