Krakow is planning a budget for 2024
Krakow’s draft budget for 2024 assumes that the city’s total revenues will reach almost PLN 8 billion, which means their increase by 16.5%. compared to the plan adopted for 2023 (then the starting amount in the project was PLN 6,800 million).
The city’s total expenses in 2024 are planned at PLN 8,558 million – an amount that is 6.7% higher than last year. higher than that adopted for 2023 (PLN 8,022 million).
City revenues
According to the project, the city’s total revenue in 2024 consists of:
- own revenues of the commune (PLN 3,047 million)
- the commune’s share in PIT and CIT taxes (PLN 2,951 million)
- subsidies and subsidies from the state budget (PLN 1,960 million)
- funds from foreign sources (PLN 35 million).
Recently, the importance of own revenues obtained by the commune, among others, has been increasing in the structure of the city’s total income. from local taxes (e.g. real estate taxes), various types of fees (e.g. garbage collection, road occupation, alcohol sales licenses) or property management (e.g. property rental and leasing). In the plan for 2024, they will constitute 38.1%. all city resources.
The opposite trend concerns PIT revenues – their importance in the total revenue is decreasing as a result of the government reforms of the tax system introduced in 2019–2022, which reduces the revenue potential of the local government. These include: exemption from personal income tax for people up to 26 years of age (the loss for Krakow in 2019–2023 is PLN 175 million), changing the tax rate from 18 to 17 percent. and an increase in KUP (the loss for Krakow in the years 2019–2023 is PLN 690 million), an increase in the limit enabling lump-sum taxation and, as a result, the outflow of some existing taxpayers (the loss for Krakow in the years 2021–2023 is PLN 140 million) and, finally, the Polish program Order and its amendment (the loss for Krakow in 2022–2023 is PLN 1,300 million). These radical losses in PIT revenues were never adequately compensated by the government. Kraków received financial support under the supplementary subsidy for 2022 in the amount of PLN 224 million, and for 2023 – PLN 251 million. Additionally, this year, as a result of the criteria adopted by the government for the division of the supplementary general subsidy, which are unfavorable for large local governments, Kraków will receive only PLN 131 million.
Subsidies and grants currently account for approximately 25 percent. city budget. These funds are entered into the annual financial plan based on information from the Minister of Finance. They are planned in the state budget, which also means that they may change during work on the budget act. Among these transfers, the largest item is still the educational subsidy and at this stage its amount in 2024 in the Krakow budget is estimated at PLN 1 billion 512 million. Krakow will also receive funds as part of targeted subsidies to finance tasks commissioned in the field of government administration – they will be intended, among others, for: for the payment of family benefits and benefits from the alimony fund (PLN 131 million). The local budget will also receive subsidies to co-finance the city’s own tasks (for the payment of permanent social assistance benefits and for the operation of social welfare homes in the total amount of PLN 36.7 million).
Krakow is still waiting for the release of EU funds under the National Reconstruction Plan. The city is currently focusing on the best possible preparation of new investments, i.e. on developing the necessary documentation and obtaining the required decisions, which will allow for immediate transition to the implementation stage as soon as there is an opportunity to finance the work. The list submitted to the KPO included the city’s priority investments, including: construction of the Cichy Kącik – Azory tram line, construction of the Balicka Route, construction of the “Planeta Lem” Literature and Language Center, reconstruction of WKS Wawel sports facilities and enlargement of the Żeromski hospital with an additional pavilion for the emergency department along with equipment. Foreign funds would significantly accelerate the implementation of these projects.
Current expenses
The largest part of the city’s expenses are current expenses, which guarantee the efficient functioning of the city body and ensure the maintenance of the appropriate quality of municipal services. In 2024, the city plans to allocate PLN 7,553 million for this purpose, which means an increase of approximately 19%. compared to the plan adopted for the previous year.
In next year’s current expenditure structure, education and upbringing will invariably have the largest share (31.8%), followed by: transport and communications (15.8%), municipal management and environmental protection (9.6%). ) and social assistance (6.3%).
Current economic phenomena, as always, are most reflected in the level of current expenses. We are still dealing with inflation, high energy prices and wage pressure. All this causes the costs of local government operation to increase and greater financial outlays are necessary to maintain municipal services at least at the same qualitative level. Even greater – to ensure the expansion and development of the city’s offer.
One of the areas where the increase in costs is very visible is transport services. Public transport generates more and more expenses, which means that the city increasingly covers them from its own funds – from 2022, 65%. According to estimates, in 2023 the city will spend approximately PLN 933 million on public transport, of which only approximately PLN 380 million will be covered by ticket sales revenues. Moreover, the increase in the city’s subsidy is influenced not only by smaller-than-planned changes in the tariff, but also by the commissioning of new investments (launching the tram line to Górka Narodowa generates an additional cost of nearly PLN 30 million this year).
An area in which a significant increase in current expenditure is planned is also education and upbringing – in 2024, the city has reserved PLN 2.6 billion for this purpose. A problem that local governments have known for many years when preparing the educational budget is the insufficient amount of educational subsidies provided by the government. Its inadequacy in relation to the needs results from the lack of defining cost standards that would allow determining the real cost of implementing educational tasks or goals set for the education system. As a result, in order to ensure optimal conditions for the functioning of schools and institutions and the highest teaching standards, Krakow allocates additional funds from its own income for educational expenses every year. The city’s subsidy for tasks covered by the educational subsidy in 2022 amounted to 36.6%. (PLN 643 million), and for all educational tasks – 46.7%. (PLN 1,054 million). The level of current expenses is also influenced by the fact that the city, by decision of councilors, assumed the obligation to calculate subsidies for non-government kindergartens at higher rates than those applicable in the Act, which in 2023 alone generated an additional cost of approximately PLN 51 million. It is also worth mentioning the impact of decisions made at the central level – to finance this year’s teacher salary increase, Krakow needs an additional PLN 75 million in the current budget.
Investments
The plan for 2024 assumes capital expenditure of PLN 1,004 million, of which PLN 864 million has been reserved for the investment program alone.
Krakow intends to spend PLN 850 million on city-wide investments next year, and PLN 14 million on district investment projects.
As always, continuing tasks will be a priority in the city’s investment plan. In the area of transport and communication, these include: construction of a tram line to Mistrzejowice, construction of 8 Pułku Ułanów Street, expansion of Kocmyrzowska Street, as well as Meiera, Maciejkowa, Stelmachów and Piaskowa streets, and construction of an access road from the Kliny estate to the SKA station in Opatkowice. In the area of greenery and broadly understood ecology, the Kurczaba park and the park in the White Seas will be implemented, as well as the construction of an enclosure for chimpanzees and Japanese macaques. Tasks in the field of education and sports include primarily the expansion of school facilities (including Primary School No. 124 at ul. Sucharskiego, ZSP No. 8 at ul. Wrony, Primary School No. 54 at ul. Tyniecka, ZSP No. 15 at ul. Grochowa) and sports (a complex in the Wolica estate and an indoor swimming pool in the KS Clepardia area). In the area of social and family matters, the expansion of nursery infrastructure will continue – new facilities will be built in various areas of the city, including: at Dekerta, Drożyska, Krzemionki, Działowskiego, Wróblowicka and Niebyła streets. In the area of culture, funds were provided, among others: to complete works on the construction of the KL Plaszow Memorial Museum, the building of the Krakow Music Center, the revitalization and modernization of Fort St. Benedykt and the modernization of Kossakówka.
In 2024, Kraków will also start implementing new investment tasks. In the area of communication and transport there will be, among others: expansion of al. 29 Listopada (section of ul. Opolska – city border, construction of a road parallel to ul. Turowicza (section from ul. Gen. Bolesława Roi to the viaduct towards the Shopping Center), construction of a bicycle path along al. 29 Listopada (from ul. Żelazna to Woronicza). In terms of greenery, financing was reserved for Planty Podgórskie (the northern part of Aleksandry Park), Grzegórzecki, Krakowianki and Złocień parks and for the revitalization of the interiors of building quarters in Nowa Huta. The budget also included tasks in the field of education and sports (including . adaptation of the MDK attic at ul. Na Wrzosach, construction of a sports pitch and community center in the Mogyła estate, construction of a sports hall at VIII High School, modernization of sports infrastructure in the area of WLKS Krakus Swoszowice or construction of a Youth Center in Łuczanowice) and culture (including adaptation premises at Ks. Meiera Street for a new library branch, construction of a community center at Koszykarska Street
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