Kučinskis: new municipal financial equalization model is acceptable and will be forwarded

Finance Minister Māris Kučinskis has expressed support for the new municipal financial equalization model developed by the Ministry of Finance. In an interview, he said the model is not bad and will be forwarded for approval, but acknowledged that discussions about improvements are possible if someone offers a better solution. However, he stressed that the core direction will not be significantly altered.

Kučinskis explained that the new model is better than the previous one, which was outdated. According to him, the old system would not allow many regions to provide even basic services. He noted that he had thoroughly studied the issue before taking office, while working in a Saeima committee, and that the tax share allocated to municipalities is equalized worldwide to ensure no one is left without funds.

Meetings are planned with the Latvian Association of Local Governments and municipal groups to check if improvements are needed. Kučinskis also commented that some municipalities, such as Mārupe, Babīte, and Ādaži, dislike the model because they feel they pay too much. He argued that these municipalities did not attract residents themselves; people chose to move to wealthier areas. At the same time, he acknowledged that these municipalities lack schools, kindergartens, and infrastructure.

In contrast, municipalities like Krāslava and Ludza would lack funds for basic services without the new model, according to the minister. He also highlighted that keeping the property tax under municipal control is a positive feature, serving as a tool for generating revenue and attracting businesses.