The capital city of Hungary, Budapest, has adopted a "survival package" of cuts to avoid bankruptcy, as the city's mayor, Gergely Karacsony, blames Prime Minister Viktor Orban's government for squeezing revenue for political gain. This move marks the latest clash between Orban's nationalist government and cities led by Hungary's fractured opposition.
Mayor Karacsony stated that his office would stop paying taxes to the country's Finance Ministry in an attempt to continue providing services such as public transport and paychecks for the city's 27,000 employees. This decision comes after Orban's policies, including restricting Budapest's borrowing ability and increasing its contribution to the national budget to 58 billion forint ($168 million) this year. Orban has also deprived municipalities of crucial income from sources such as levies on local businesses.
Karacsony accused Orban's government of missing deadlines to deliver funds to Budapest, and said that the city will apply for a bank loan to maintain liquidity, although such a move would require approval by Orban's cabinet. He further added that he expects the municipal budget deficit to rise to 76.1 billion forints in August from the projected 32.1 billion in June, citing the pandemic and the energy price crunch as contributing factors.
Orban's ruling Fidesz party, which made major gains in last year's parliamentary elections, has been accused by critics of bleeding opposition-led cities of revenue to gain political advantage. The party has been directing state support, often financed by European Union developmental aid funds, into centers that it controls, while not doing the same for Budapest and a few other large cities.
The Fidesz party pushed back against the accusations, stating that "wasteful, bad urban management" was behind Budapest's financial hardships. It cited a failed advertising tender and public procurements for lost income, as well as rising costs at some investments due to execution delays.