Austerity brake on municipalities

In the 2024 local elections, the administration of many municipalities, especially in major cities, shifted from the ruling party to the opposition.

The government, which emphasizes democracy at every opportunity, is not taking lessons from this defeat but rather missing no opportunity to punish the municipalities that have passed to the opposition.

Following the election, a circular on austerity measures was published, banning municipalities from hiring new personnel and, even more severely, making it subject to permission for them to issue new service tenders. In many municipalities, tenders were canceled to obtain permission, tender specifications were modified for approval, and unfortunately, some services could not be carried out due to these permissions being delayed or sometimes never granted at all.

The bill on austerity measures recently submitted to the Grand National Assembly of Turkey (TBMM) also contains provisions that will put municipalities in a difficult position. Since some of these provisions are not clear, I want to talk about a single regulation that is open and clear: the street lighting shares of municipalities.

Approximately ten years ago, during a period when the majority of municipalities were under AKP administration, it was regulated that a portion of general lighting expenses, which were entirely paid from municipal budgets, would be covered by the general budget and a portion by deductions from the share that municipalities and special provincial administrations receive from general budget tax revenues.

In essence, this regulation was extremely positive as it reduced the financial burden on local governments in financing the general lighting service, which is essential for public well-being. However, the bill submitted to the TBMM takes a step back from this positive regulation, increasing the deduction rates to three times the statutory rate and 50% more than the currently applied rate. 

With the regulation in the bill, the deduction rates to be made from the municipalities' shares of general budget tax revenues to cover general lighting expenses are arranged as follows: the 10% statutory rate, which has been applied as 20% within the borders of metropolitan municipalities since 2014, is increased to 30%; the 5% statutory rate, which has been applied as 10% in other municipalities and their adjacent areas since 2014, is increased to 15%; and the 10% statutory rate, which has been applied as 20% in the relevant special provincial administrations outside these borders since 2014, is increased to 30%.

Actually, the government had made a similar move before. During the period when metropolitan municipalities were under AKP administration, the cost of subways built by the Ministry of Transport was deducted from the municipalities' general budget tax revenues at nominal rates; however, after Istanbul and Ankara passed to CHP administration, the rate of deduction from municipalities' general budget tax revenues due to subway construction was increased.

In other words, the government, having lost the municipalities, is using the weapon of reducing municipal revenues—which it has used before—to make municipalities unable to provide services, but this time it is acting according to a different scenario.

Although it may appear that opposition municipalities are the ones being punished by these regulations, as long as the AKP administration does not embrace democracy and learn to digest defeat, the ones truly being punished are the citizens who are deprived of municipal services.