The new municipal financial equalization model proposed by Latvia's Ministry of Finance is expected to slow down the disparity between wealthy and impoverished municipalities, according to Vents Armands Krauklis.
Vents Armands Krauklis, the executive director of the Regional Development Centres and the head of Valkas municipality, discussed the new municipal financial equalization (PFI) model proposed by the Ministry of Finance in Latvia. He indicated that, while this model aims to slow the growing disparity between affluent and impoverished municipalities, it will not completely eliminate it. His observations are based on various consultations held with the Ministry, and he noted that joint discussions among municipal leaders are essential to form a consolidated view going forward.
Krauklis explained that the Ministry of Finance has conducted two advisory board meetings where he has participated, and although surveys have been distributed to RACA members, a unified position is still pending as detailed calculations from the Ministry regarding different funding models were only received recently. A significant meeting is anticipated to take place on February 18, where municipal leaders will discuss their collective stance before addressing the financial minister and his specialists. Krauklis believes that while the new funding model has some beneficial elements, there are still areas that require careful consideration and potential improvement.
The context of this discussion is critical as municipalities across Latvia face significant challenges due to varying levels of wealth and resources. By introducing a new financial model, the Ministry aims not only to address these inequalities but also to enhance the overall service delivery in municipalities. However, the success of this model will largely depend on the collaborative efforts among municipal leaders and their ability to voice common concerns and recommendations to the Ministry of Finance.
