Despite an increase in total revenues of more than 100 million euros compared to the previous year, Montenegrin municipalities welcomed the end of 2024 with a budget deficit, a sharp jump in spending, record amounts of outstanding liabilities, and a serious increase in tax debt, according to the Ministry of Finance's Report on the State of Public Finance at the Local Level.
Although all 25 municipalities generated a total of 593,76 million euros in revenue, which is 107,5 million more than in 2023, expenditures reached 452 million, which is 93 million more than at the end of 2023, and the year ended with a deficit of 2,04 million euros and outstanding liabilities of 68 million. At the same time, loan debt amounted to 96,17 million, tax debt exceeded 122 million euros and increased by 41 million annually, while gross salary expenditures increased by more than 7,7 million euros.
The number of employees in municipalities and their public institutions and companies has reached almost 16.000. The figure for employees is not final because there is no data on temporary contracts, but this data refers to those employed for an indefinite and fixed term.
The structure of revenues is dominated by current revenues (taxes, fees, charges and other current revenues) which amounted to 368,86 million euros, followed by receipts from loan repayments and funds carried over from the previous year of 126,04 million euros, donations and transfers of 91,16 million euros, receipts from the sale of assets of 5,85 million euros, and loans and credits of 1,85 million euros.
These data show that in addition to basic revenues from taxes, fees and charges, municipalities financed a significant part of their local budget with money carried over from the previous year and transfers from other sources.
The Ministry of Finance explained that compared to 2023, the largest increase is evident in the money transferred from the previous year, which amounts to 45,53 million euros.
80 million went to gross earnings
"The transferred funds mostly relate to funds intended for the implementation of capital projects. In addition to the above, revenues from personal income tax have increased significantly, by 18,37 million euros," the Ministry of Finance states.
This government department explained that the amendments to the Law on Local Self-Government Financing that entered into force led to a decrease in the revenues of municipalities from the southern and central regions, because part of the money was redirected to northern municipalities, as well as the municipalities of Tuzi and Zeta, in the form of state transfers (grants). According to data from the Ministry of Finance, grants to municipalities in 2024 amounted to 17,26 million euros.
Budget expenditures of all municipalities in 2024 amounted to 452,09 million euros, an increase of 2023 million euros compared to 93,42. According to data from the financial report, total current expenditures of local governments in 2024 amounted to 253,63 million euros, an increase of 41,51 million compared to 2023.
The largest increase in current spending was recorded in transfers to institutions, individuals, non-governmental organizations and the public sector, which increased by 28,20 million euros and amounted to 116,25 million. Also, expenditures for gross wages and contributions paid by the employer increased by 7,71 million euros and reached 79,82 million. These two segments significantly contributed to the overall growth of current spending in 2024.
At the same time, there was also an increase in capital expenditures, which increased by 2023 million euros compared to 47,13, reaching 145,7 million. This increase, according to the Ministry of Finance, is the result of increased investment activities and greater implementation of planned capital projects in some municipalities.
Outstanding liabilities 68 million
The total outstanding liabilities of local governments as of December 31, 2024 amounted to 68,41 million euros, according to data submitted by municipalities to the Ministry of Finance. Compared to the same date last year, liabilities decreased by 4,72 million euros, and according to the report, the largest part of this decrease relates to liabilities arising from loans and credits.
"In the structure of outstanding liabilities, the largest share is held by outstanding liabilities on loans and credits and on the basis of debt repayment, which mostly relate to outstanding liabilities to the state on the basis of transfer loans. A significant part of outstanding liabilities relates to unpaid liabilities on the basis of taxes and contributions on employee salaries," the Ministry of Finance states.
The aggregate data shows that the largest amount of outstanding liabilities was recorded in the municipalities of Budva (15,23 million), Herceg Novi (10,86 million), Ulcinj (10,27 million), Cetinje (8,41 million), Bar (8,48 million), Rožaje (5,71 million euros)... On the other hand, some municipalities, such as Andrijevica, Gusinje, Tuzi and Zeta, had no registered outstanding liabilities at the end of 2024. According to the structure, the largest part of outstanding liabilities relates to liabilities based on loans and borrowings (17,36 million), liabilities based on debt repayment (26,26 million) and liabilities for current expenses, including salaries and contributions (20,37 million). In total, according to the data from the report, as many as 14 municipalities had outstanding liabilities above one million euros, while seven of them had less than 100.000 euros of outstanding liabilities.
There were 15.984 employees in municipalities at the end of 2024, and that figure is approximately at the same level as at the end of December 2023, when, according to data from the Ministry of Finance, 15.869 employees worked in municipalities.
Non-payment of obligations for several years
The tax debt of municipalities, their public institutions and companies based on taxes and contributions on employee salaries amounted to 122,3 million euros, according to data from the official report of the Ministry of Finance. Of this amount, 63,99 million euros refers to current debt, 49,24 million euros to the 2015 reprogram, while 9,06 million euros is from the 2022 reprogram. At the end of 2023, the tax debt of municipalities, their public institutions and companies based on taxes and contributions on employee salaries was 81,31 million euros.
The largest total tax debts, which include the debt of public institutions and companies owned by municipalities, were recorded in: Cetinje - 21,23 million euros, Berane - 18,80 million euros, Nikšić - 14,71 million euros, Ulcinj - 12,70 million euros, Pljevlja - 12,10 million euros, Bijelo Polje - 11,24 million euros, Rožaje - 11,06 million euros... The municipalities of Plav (3,77 million), Podgorica (4,80 million) and Danilovgrad (4,46 million) also have significant debts.
Of the total debt, more than 58 million euros originate from previous reprogrammes – most of them from 2015, which indicates a long-term non-payment of obligations. According to the Ministry, part of that reprogramme has already fallen due again, so for 2015
The largest tax debt was recorded in: Cetinje - 21,23 million, Berane - 18,80 million, Nikšić - 14,71 million, Ulcinj - 12,70 million, Pljevlja - 12,10 million, Bijelo Polje - 11,24 million, Rožaje - 11,06 million ...
Local governments in Montenegro, including municipal administrations, public institutions and companies owned by them, had a total of 2024 employees at the end of 15.984, according to data from the report submitted by municipalities to the Ministry of Finance. Employees are classified into three categories: municipal administrations – 5.463 employees, public institutions and tourism organizations – 2.031 employees, companies (utilities and other companies) – 8.490 employees
The capital city of Podgorica has the largest number of employees, with a total of 3.936 workers, followed by Budva – 1.455 employees, Nikšić – 1.216
Herceg Novi – 1.066 and Bar – 1.032. A significant number of employees are also recorded in Pljevlja – 785, Bijelo Polje – 693, Kotor – 719 and Berane – 781.
At the other end of the scale are the municipalities with the smallest workforce: Petnjica – 73 employees, Šavnik – 88, Žabljak – 145, Zeta – 125 and Gusinje – 129. These municipalities are dominated by employees in local governments themselves, while the number of employees in public enterprises and institutions is relatively small.
Mojkovac, Petnjica, Šavnik, Zeta, Tuzi and Žabljak without credit
The total debt from loans taken out by municipalities at the end of last year amounted to 96,17 million euros. Of the total amount, 33,56 million refers to domestic debt, and 62,62 million euros to foreign loans.
At the end of 2023, credit liabilities amounted to 107,78 million euros.
The largest loan liabilities, as can be seen from the report, are in Budva - 24,52 million, Nikšić - 17,37 million, Podgorica - 17,69 million, Cetinje - 5,05 million, Tivat - 4,98 million, Bijelo Polje - 4,43 million.
According to the report, the municipalities of Mojkovac, Petnjica, Šavnik, Zeta, Tuzi and Žabljak are not in debt.
Based on data from the Ministry of Finance, the total debt based on loans taken from the Equalization Fund at the end of December 2024 amounted to 300 thousand euros. These loans were used by two municipalities - Danilovgrad 260 thousand and Gusinje 40 million euros.
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