The Association of Municipalities and Local Elected Officials presents demands for a real increase in funding in the 2026 Budget

2025-11-27 08:34:00, Aktualitet CNA

The Association of Municipalities and Local Elected Officials presents demands

The Association of Municipalities and Local Elected Officials of Albania has presented to the Committee on Economy, Employment and Finance in the Parliament of Albania the proposals and recommendations for the 2026 draft budget, with a focus on the real increase in funding for local self-government units.

The proposals were presented on behalf of the Association by: Mr. Fisnik Qosja, President and Mr. Albert Melyshi, Vice President.

The Association assesses that the process of drafting the 2026 Budget constitutes an essential moment for strengthening the financial autonomy of local government, in accordance with Law No. 68/2017 “On Local Self-Government Finances” and Law No. 139/2015 “On Local Self-Government”.

Unconditional and sectoral transfers should guarantee the real exercise of decentralized functions and reduce territorial inequalities between urban and rural and mountainous municipalities.

Current problems requiring urgent intervention

The Association estimates that, despite formal increases in several budget items, the 2026 draft budget does not meet the real financial needs of many municipalities, especially: Rural and mountainous municipalities with large geographical areas; Municipalities with low population density and high cost of services; Municipalities that cover decentralized functions with increasingly higher standards and increasing costs.

The association emphasizes that the current transfer allocation formulas do not reflect the real cost of services, especially in remote and mountainous areas, where infrastructure, transportation, and distances significantly increase costs per service unit.

Key requirements and recommendations of the Association

1. Doubling the unconditional and sectoral transfer in the 2026 Budget

The association requests the doubling of the sectoral fund of 14,801 million lek, emphasizing that:

-The cost of decentralized functions (preschool education, social services, community centers, culture) has increased significantly;

-The gap between real cost and financing has started since 2016 and has deepened every year;

-Doubling the fund would ensure dignified service standards for citizens in all municipalities.

2. Creation of a Special Fund for Territorial Equality

The association proposes the establishment of a special fund to truly address geographical inequalities, by increasing the weight of the criteria: large territorial area, low population density, high transport and infrastructure costs, and remote and mountainous areas.

3. Review of the transfer formula in 2027

The association calls for the launch of a transparent and inclusive process during 2026 to review:

-coefficients of population weight, area and services,

-the methodology for calculating fiscal capacity, including the mineral royalty from 5% to a minimum of 30% in favor of municipalities.

-minimum spending standards for local functions.

Association Commitments

The Association of Municipalities and Local Elected Officials is committed to:

-support the growth of local revenues through better administration, digitalization and expansion of the tax base,

-strengthen transparency and efficiency in resource management,

-provide technical expertise for any institutional discussion on local finance reform.

-decentralization and financing of the water supply and sanitation sector, etc.

The Association's Position

The real increase in unconditional and sectoral transfers, support for mountainous and rural municipalities, and strengthening of performance mechanisms are not technical requirements, but political requirements necessary to guarantee the functioning of local self-government, territorial equality, and the provision of quality services to citizens.

The association underlines that without a substantial increase in local financing, decentralization and local development reforms remain incomplete./ CNA