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Employees of the municipality in Hajdú-Bihari county, which has a population of 18,000, have not received their salaries since June, but kindergartens, nurseries, nursing homes, health services and the mayor’s office may also not be able to function. There are two reasons for this: more than 400 million forints were deducted from the municipality’s accounts as a penalty for NAV due to irregularities in the gas engine project, while the Ministry of Public Administration and Regional Development has been blocking the transfer of net funds of about 500 million forints that the municipality has paid since April because, according to them, the budget was not adopted properly.
Back in 2016, the Fidesz municipality agreed with the Ministry of National Economy on the implementation of the gas engine program. The system uses the gas produced here as a “by-product” of hot water to generate electricity, thus guaranteeing the energy needs of public buildings. According to the grant agreement, only buildings of state-owned, municipal companies or business associations that are 100% owned by the local government can be included in the program, unless they are professional sports facilities. Nevertheless, the 3,200-seat city stadium, which does not meet the NB-I football match solicitation conditions, namely for professional sports purposes, has also been included among the beneficiaries. The signatory of the contract was the Fidesz mayor Margit Veres, who was sentenced to five years in prison at the same time for having previously accepted money and a car from a building contractor while working as a municipal employee. (As we wrote in the newspaper, despite the final verdict, the former mayor did not go to jail. He first asked for an extension, which was granted by then-Justice Minister Pál Woerner, and then, according to 24.hu, he is believed to be one of the six people pardoned by outgoing President János Áder in spring 2022.) Margit Veres could not hold the mayoral post due to the final verdict, necessitating a by-election. The elections held in 2018 were won by Péter Hegedű, who won independently but with the support of the opposition, and later in 2019 the local authorities also confirmed him in the now “regular” local authority elections.
In 2019, 34% of the previously 100% municipally owned stadium became the property of the municipally owned Balmazújváros Sport Kft., which was liquidated in 2020 due to payment difficulties, and the ominous minority of real estate parts belonged to the Balmazújváros Football Club, whose owner is Fidesz MP István Tiba. The Hungarian State Treasury (MÁK) conducted a special on-site inspection two years ago in connection with the gas engine project, initiated irregularities procedures due to the change in ownership of the stadium, and subsequently ordered Balmazújváros to repay the entire amount of support, with a total of 427 million HUF in interest, despite the gas engine project being fully completed.
– We tried to convince the state treasury to take out about 30 million forints from the stadium subsidy, which we would repay, but would not impose such a burden on the entire city, – Peter Hegedes told our newspaper. He added: We later appealed to the Prime Minister’s Office, but they did not accept it and upheld the decision to determine the repayment. They also argued in vain that the stadium should not have been included in the project in the first place, which, in official language, was “partially invalid” and ruled out subsequent sanctions.
The new Balmazú city government later initiated the installment payment, which MÁK determined to be 12 monthly unequal installments (which was more favorable to the municipality) and set a 10-day acceptance period. But even before the expiration of that period, MÁK rescinded the installment agreement and made a new offer, now in equal installments, which would require a complete rewriting of the city’s 2024 budget decree.
– When I was elected in 2019, the majority of deputies still supported the left-wing camp, but then two people “switched” to the other side, so the decision-making came to a standstill. Péter Hegedűs said that the same was true of MÁK’s offer, and since the representative body did not accept the offer, the installment agreement was not reached.
The first “debt collection” took place on June 10, the day after the local elections, and has continued since then to this day, with the tax authorities also taking away funds that were in principle “bound”, since the municipality has only one main account. “Only health can be used to pay the wages of skilled workers, for example. – As a result, we cannot and currently cannot pay the salaries of staff engaged in health service relations and those working in municipal offices and institutions (kindergartens, nurseries, nursing homes, city administration) within the statutory period, because there is no cover available. Since our municipality is also the place where social benefits are paid, this situation affects a total of nearly 400 people, who did not even receive their salaries and benefits for June, says the mayor.
Péter Hegedűs added: The local government had previously tried to prepare for the unexpected, and through cost-saving measures and their own revenues they raised about 270 million forints, which would have provided sufficient security for the payment of wages, but they could not prepare for the fact that the NAV had to repay 427 million forints. If they cannot even pay the wages due to public officials, the problem will be further complicated, because then the city will have to repay hundreds of millions of forints due to “breach of contract”. In addition, the representative body did not prepare a budget decree and did not accept the financial report for 2023 by the deadline, which was March 15 this year, which is why the competent authority suspended net funding to the local government in April, which meant a further serious loss of revenue. However, on June 10, the mayor took advantage of the legal amendment to pass the budget decree within his power. The government amended the Local Government Act in the transition period after the elections, according to which the mayor can make independent decisions if certain conditions are met. However, a representative of Fidesz filed a complaint against the decree passed in this way, and the case is currently being heard in the Curia.
– If the government transfers the net funds that would have belonged to us, then, combined with our own revenues, we will have enough guarantees to keep municipal, office and agency staff on their salaries, despite the debt collection by the NAV – the mayor said, adding that from about half a billion forints they will be able to pay not only salaries, but also the remaining repayment obligations arising from the controversial gas engine project, thus ending the debt collection efforts.
The mayor was sent home by the secretary of state as his power slipped
“The livelihoods of more than 400 local government workers are threatened due to a political struggle that is too small to be justified. They can do nothing about the political tug-of-war, and the government is using their negative living situation to create emotions. The meager income has always been insufficient to guarantee a month’s living, but now it is the second month without salary. The self-proclaimed family-friendly prime minister and his administrative elite, while happily enjoying the rising salaries, throw up their hands and show that they are powerless if there is a way around it, because the law does not allow salary transfers. Why? There is a wage guarantee fund for competing industries! Why can’t the state transfer the payments as advance payments?” – Péter Hegedűs, mayor of Balmazur New Town, and Péter Boros, chairman of the Hungarian Union of Civil Servants, Public Employees and Public Service Workers, said in a joint statement that they submitted a joint petition to the Ministry of Public Administration and Regional Development in protest on Tuesday.
State Secretary Csaba Latorczai, who received the petition, said: The mayor should go home, convene a meeting of the representative body, legally propose a budget decree and remove obstacles to financial difficulties. DJ
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