By: Genc Namani

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The Association of Kosovo Municipalities (AKM) held the meeting of the Council of Mayors, with the participation of the Minister of Finance (MF) Mr. Bedri Hamza, to discuss the Draft Law on Local Government Finance.

The President of AKM, Mr. Agim Veliu informed the attendees that through the mechanism of the Association of Kosovo Municipalities, the necessity of amending the Law on Local Government Finance has been raised as an issue. In the previous years, AKM in cooperation with the Collegium for Budget and Finance have identified the gaps in the existing law as well as an analysis was undertaken, aiming to define the areas that need to be amended in the Law.
This year, the Ministry of Finance is in the process of amending the Law on Local Government Finance and AKM has participated in the Working Group appointed by respective Ministry. Recommendations put forward by AKM are fully incorporated in the version of the Final Concept Paper adopted by the Kosovo Government.
One of the issues that demanded special attention was the review of all the funding formulas envisaged by the law, pointing out that the general grant will be reduced from 10% to 9% due to the creation of a grant for services and that in coming years, fire-fighters and market inspectors wages will not be made through Municipalities because the competencies regarding these services are centralized.

Also, the basic criteria for the allocation of specific grants for education, health and social services have been changed and adapted to the requirements of the AKM. As the main criterion for the allocation of the education grant will be the teacher’s norm rather than the number of students. Criterion for the allocation of health grant, in addition to the number of patients, costs will include patients’ analysis as they have created greater cost compared to patient visits.
In his speech, the Minister of Finance, Mr.Bedri Hamza-thanked the structures of AKM and its representatives in the working group for cooperation with MF, for giving recommendations on improving the Law on Government Finance, which is of special importance for the functioning of local government. He stressed out that this draft law foresees to define the criteria for the allocation of individual grants. In this regard, the Government of the Republic of Kosovo approves the administrative instructions proposed by the line ministries.

Minister Hamza emphasized that as a result of the budget transfer and the number of employees from the local to the central level for centralized services, the general Grant will be reduced from 10% to 9%, and this reduction will have a neutral effect on the budget of municipalities.
In conclusion, after the discussion, the Council of Mayors decided that all the requests emerged from the meeting should be taken into account by the Ministry of Finance during the finalization of the draft law.